CAVU Resources Inc., Tulsa, Okla., (Pinksheets: CAVR) plans to acquire a 900-acre and 60-well lease in Nowata County, Okla., from JH Field Service LLC, an Oklahoma limited liability company, for $150,000 in cash and stock.
The asset, known as the Hogshooter lease, has five zones targeted that could potentially produce both gas and oil. The wells in the area have historically ranged from 600 to 1,200 feet; these shallow wells will allow for a rapid development program. CAVU will install state of the art storage and control systems and use the existing transmission lines owned by Envirotek Fuel Systems Inc. for its gas production and delivery.
CAVU plans re-enter the existing wells, utilizing new technology, chemically treating and re-stimulate up to 40 oil and gas wells. The project originally was a water flood and produced approximately 2 million barrels of oil during a 20-year period. The project was shut in for about seven years and with limited reworking and stimulation of the wells until JH Field acquired the project in 2009. JH Field has re-entered four wells and has also cleared the locations for 20 more.
With this recent work, the field is currently producing four to five barrels of oil a day with anticipated production being in excess of 100 barrels a day. CAVU has targeted the following zones: the Bartlesville sand and Wayside sand for oil, the Mulky coal bed, Roe coal bed and Mississippi lime for gas. CAVU plans to begin operations the second week of June.
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