Exterra Energy, Inc., www.exterraenergyinc.com – the oil and gas exploration/production firm out of Amarillo, Texas which is pursuing a shrewd growth strategy through the acquisition of undervalued properties, announced a milestone in its East Texas package with the closing of 31 wells on 12 leases in the Woodbine Formation at the East Texas Field.
An operational agenda announced in April projects the completion of the entire package as being just around the corner, and EENI’s closing on these wells will allow for immediate re-equipping and a projected net income of roughly $125k/month in 3-4 months after work-over.
The package as a whole is comprised of some 395 wells spanning 3,500 acres in Gregg, Rusk and Upshur counties, and its infrastructure is primarily pump-jacks, submersible pumps, tank batteries and support equipment.
This field has a proven record of productivity as one of the oldest and most prolific US resources, currently producing 100-120 BDP on only 52 wells (~$200K/month).
The Company plans to spend about $10k per well to re-equip approximately 100 wells over six months and put them into production, generating roughly $500k/month, bringing the total to $700k/month in net cash income, with the remainder of the wells being reworked via revenue generated from the 152 producing wells.
CEO of EENI Todd Royal, while pleased with current production cash flow, believes the Company’s goal of re-equipping and bringing additional wells online within 6-8 months of closing will generate substantial net income, and is the wisest course.
Royal cited the abundant acreage and potential for new drilling, as well as the upside from the deepening of existing prospects, as fundamental to the strategy employed, and characterized the deal as the “cornerstone” of the Company’s business plan to blow out all the stops when it comes to enhancing shareholder returns while adding to the oil and gas portfolio.
The Company is heavily active in the Newark East (Barnett Shale) Gas Field in North Texas, and holds an undivided interest in some 17.75k gross acres with 63 producing wells.
Also working in the West Texas Permian Basin, EENI has mineral acres, oil and gas wells, wells being implemented and treated, a new saltwater disposal facility, and a huge 12-mile gas collection system (in Pecos County, where EENI has a 120 acre/12 well operation); all of which complements a major new gas contract with Panther Pipeline and Southern Union.