23rd Aug 2018 11:15
LONDON (Alliance News) - Mayan Energy Ltd on Thursday said it has purchased a 60% working interest in three horizontal and two vertical Austin Chalk wells in Gonzalez County, Texas, for USD500,000.
The oil & gas company will fund the acquisition equally in cash and shares. Mayan Energy intends to issue 25.3 million shares at a price of 0.70 pence each.
The stock was trading 8.6% lower on the day Thursday at 0.53p per share.
Mayan Energy targets net production from the five well package to between 300 and 500 barrels of oil per day.
The company intends to use a coiled tubing rig to clean out, work-over and acidise the Austin Chalk zone in each of the horizontal wells. Upon completion, the company expects the potential production in a range of 60 to 80 barrels of oil per day per well.
Meanwhile, the operating cost per barrel estimated to be between USD18 and USD20, as water from these wells will be transported via truck for disposal.
Mayan Energy plans to mobilise equipment to the Gonzalez County field in the first week of September, with the initial work-over programme expected to take eight weeks.
At the end of June, the company agreed to acquire interests in 12 well bores, including seven additional vertical wells at the Stockdale field in Wilson County, and three horizontal and two vertical Austin Chalk wells in Wilson and Gonzalez Counties for a total of USD605,000.
On Thursday, Mayan Energy said it decided not to proceed with the purchase of seven Stockdale wells.
Looking forward, the company said it continues to assess additional well packages in the region as it builds out its production base.
"Our technical team has demonstrated their capability to achieve results by exploiting existing well bores using cutting-edge and proprietary tools and techniques," said Managing Director Eddie Gonzalez.
"Thanks to today's agreement, our team now has many more opportunities to replicate this success," Gonzalez continued.
"I expect the Gonzalez County wells to form the backbone of our production."
Related Shares:
MYN.L