The Park City, Kentucky Oil and Gas Project
- Aus-Tex holds a 100% WI and a 78.125% NRI
- Target formations are the Limestone and New Albany
- Proven reserves of 298,180 barrels of oil and 120,980 Mcf of gas
- Probable reserves of 870,110 Mcf of gas
- PIIP reserves of 9.79 BCF of gas
- 17 wells have been drilled
- Four of these have been completed. Three are currently producing oil and one is capable of producing gas but has been shut-in
- Additional wells will be completed
- Daily production is currently averaging three-to-five barrels of oil
ABOUT THE ASSET
This project - located near the small town of Park City, Kentucky in the Southwest part of the state – was acquired by Aus-Tex late in 2008 as a large multi-well, shallow gas play.
Well operations on the original 857.82 acres became the responsibility of Aus-Tex on July 1st 2009. The original mineral lease area was acquired on this date as a result of a legal settlement between Aus-Tex Exploration Inc. and the original operator, RET of Kentucky. The company now holds 1,637.4 acres of mineral leases. Current acreage holds 17 drilled wells in various stages of completion.
Since August 2009 the project has consistently generated between 65-to-114 barrels of oil per month from three shallow oils wells. The company anticipates these wells will stay on production at the current flow rates for the next 15 to 20 years. Gas wells are also present, however, the Company has not been able to achieve the sale of this gas due to the closure of the nearby Atmos Gathering gas processing unit. The closure of the plant is the result of a legal dispute between
Atmos and several nearby landowners.
When the Atmos legal matters are resolved, Aus-Tex will begin evaluating a revised work program for this asset. Aus-Tex is also considering a work program that envisages completion of several currently shut-in wells into oil producers.
The Company’s acreage is surrounded by over 60 previously producing gas wells owned by other parties. These wells are also shut-in due to the gas processing plant closure.
A reserve report and cash flow model was completed by a third party JORC qualified geologist and it was released to the market on January 7th, 2010.About the Project
- The Atmos Gathering and Atmos Marketing companies have an exclusive area of mutual interest for the county of Edmonson that holds these wells. Because there is no other nearby processing facility with nitrogen removal capabilities, operators holding gas wells in this county must currently deliver and sell their gas to the Atmos companies.
- The third party reserve reported has validated the significant value of Park City for the company.
- The primary hydrocarbon focus of this project is natural gas with a secondary focus on oil.
- The 1,637.4 acres of mineral leases provide adequate drilling opportunities for an estimated 30 to 100 additional wells. To determine a more accurate well count further testing of the natural gas producing New Albany shale formation will occur when the Atmos facility re-opens. At that time, a more specific work plan including well count, timing and production estimates for both oil and gas will be made.
