Savoy Energy Corp., a Houston based oil and gas company currently focused on the reworking of existing Texas wells, has detailed their plans covering their acquired wells in Gonzales County, Texas, between San Antonio and Houston. Since oil and gas recovery always involves a certain amount of risk in achieving the desired production rates and final recovery goals, even in existing and proven wells, the information is especially useful and welcome to investors who have helped fund the companyâ€™s operations.
Savoy laid out a wide range of technical specifics regarding the wells, their potential, and the companyâ€™s operational plans.
â€¢ Initial wells will be completed in the Austin Chalk trend, a formation known for long-lived wells.
â€¢ The wells are shut-in or plugged wells, approximately 7,000 to 8,000 deep, all with casings and a previous production history, and all considered low to medium risk.
â€¢ Plugged wells will be drilled out, shut-in wells will be cleaned out and reconditioned, with wells being acidized if necessary.
â€¢ Pumping units, tanks, heater treaters, rods, and tubing will be installed as needed, and wells will be connected to tank batteries.
â€¢ Reconditioning should be completed within 3-4 months, with equipment installation expected to take another 1-3 months, and with some wells being completed early.
â€¢ Expected initial production will be in the 150 BOPD (barrels of oil per day) range, though potentially higher or lower, with the historic long life of the Austin Chalk trend wells being a major consideration.
â€¢ Savoy will use an independent purchaser to sell the oil, with the oil generally being marketed to a major refinery or pipeline.
â€¢ The current average oil price in the area is $50 per bbl.
â€¢ The company will continue to expand into other promising areas, including outside of Texas.
The overall process will involve the application of modern well technology and stringent management controls against these carefully selected sites. By evaluating and choosing existing wells carefully, and reworking them aggressively, the risks associated with traditional exploration projects is removed, minimizing the high overhead normally associated with oil and gas operations. The result is an increased asset base and cash flow.
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