UnionTown Energy, www.UnionTownEnergy.com – the oil and natural gas developer focused squarely on its diverse portfolio of excellent North American holdings, reported today that the Company’s offer to purchase the 24k-acre Darby Block property, currently operated by Talisman Energy USA Inc., was accepted.
The Darby Block is in prime geology at the tip of the Wyoming Thrust Belt, near Exxon’s massive LaBarge field. Major development work and production all along the same structural trend validates the profile of a working hydrocarbon system, a system with stacked reservoirs like this Bighorn, Madison and Nugget, all proven producers.
Analysis of third-party geological data contained in a recent report on the property has resulted in the decision to concentrate initial development on two specific targets within a 5k-acre area:
• Prospect One – 1,940 acres targeting dry gas at 7-9.5k feet in the Madison/Bighorn
• Prospect Two – 3,860 acres also targeting dry gas in the Madison/Bighorn, as well as oil in the Nugget at a depth of 17k feet
The P50 total projected recoverable reserves are upwards of 120M BOE (80M barrels of oil and 716 Bcf of gas) and the site is highly prospective, with multiple emergent targets on the horizon elsewhere within the 24k-acres.
President and CEO of UTOG, Darren Stevenson, called the acquisition a real game changer for the Company and its shareholders, citing the $10-25 in-ground oil reserve prices and massive overall resource size as the basis for considering the Darby Block to be the “crown jewel” in UTOG’s growing asset portfolio.
Among the terms of the Darby Block deal:
• Darby Block currently secured via a $1M non-refundable US deposit being advanced over the next five days by UTOG against the purchase
• $17M over the next 12 months will be paid by UTOG, resulting in a 70% working interest (75% net revenue interest)
UTOG will pay 100% of the costs for drilling/completion on Prospect one, initially gaining an 85% WI pre-payout and a 70% WI post-payout on both prospects, with the remainder going to the vendor/operators.