Treaty Energy Corp. acquires, develops and produces oil and natural gas, seeking out leases with proven, but undeveloped reserves. The company yesterday announced an agreement to acquire 54 oil and gas leases and their respective production equipment in Kansas.

The leases span 6,700 acres and include 662 “stripper wells,” oil wells that produce 10 barrels per day or less for 12 consecutive months. According to the Independent Petroleum Association of America (IPAA), stripper wells make up about 84 percent of domestic oil wells, contributing to more than 20 percent of all domestic oil. Treaty said the acquired stripper wells in Kansas run an average of 900 feet in depth, making them more economical than comparable wells in other areas.

Of the 662 wells, 450 are currently producing, generating about 115BBLS per day. The company said additional wells have been drilled and will soon be in full-swing production, boosting production to between 135 and 155BBLS per day.

Per the agreement, Treaty is obligated drill at least 75 new wells per year on the existing 54 leases.

Treaty’s CEO Randall Newton said the company is taking the necessary steps to determine the value and production capabilities of the wells.

“We have hired a highly credentialed petroleum engineer to produce the ‘production and reserve reports’ that are required for the audit of these leases prior to the closing which is scheduled to take place no later than December 2009, but could be earlier based on due diligence and how fast the current owner brings production up to the levels specified for the contract to close,” Norton stated in the press release. “We see this acquisition in Kansas as a major step forward for our company. This transaction, which employs a combination of bank and owner financing, positions Treaty to generate strong revenues and profits. We will provide more complete details on the financial structure of this acquisition following the closing.”