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Exterra picks up 31 wells on 12 East Texas Field Woodbine leases
(7/23/2010 - OGI: Houston) Exterra Energy has closed on 31 wells on 12 leases in the East Texas Field's Woodbine sector, part of an overall East Texas package transaction entered into in April. Exterra expects to close on the overall package in the near future, but closed on these wells to immediately begin the re-equipping process.
The company said it expects these wells to yield a net income of approximately US$125,000 per month within three to four months after workover. The overall package consists of approximately 395 oilwells on 3,500 acres of land consisting of pump-jacks, submersible pumps, tank batteries, and infrastructure located in the Woodbine Formation in the East Texas Field. This field is one of the oldest and most prolific producing fields in the United States, and the leases are located in Upshur, Gregg, and Rusk Counties. The field is currently producing 100-120 b/d out of only 52 wells which are making an average net income of $200,000 per month. The company plans to re-equip approximately 100 wells over a six-month period that would require around $10,000 per well to be put into production, which would then generate approximately $500,000 per month in additional net income for a total of approximately $700,000 per month in net cash income per month. The remaining wells will be re-worked through the cash flow of the 152 wells and will be a longer term project.
Todd Royal, CEO, said, "While the current producing wells generate cash flow, our goal to have the first 100 wells re-equipped and online producing within six to eight months of closing and generating approximately $700,000 per month in net income to Exterra. In addition, there is the upside potential in deepening many of the prospects along with new drilling potential as Exterra will be acquiring over 3,500 acres of leases."
Click here for earlier report.
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