EnerJex Resources, Inc. (ENRJ), a domestic onshore oil company, announced that it has expanded its Rantoul Project, which will hereafter be referred to as its "Cherokee Project", by 6,700 acres. This represents an increase of 600% from 1,100 to 7,800 acres since the beginning of 2011, and the Company's working interest in the majority of this new acreage ranges from 55% to 80%.
Production from this project has reached a new milestone of approximately 250 barrels of oil per day (BOPD), representing a 150% increase since the beginning of 2012 and a 750% increase since the beginning of 2011. In addition, 26 new oil wells and 22 new secondary recovery water injection wells have been drilled in recent weeks that are in various stages of completion.
EnerJex's Cherokee Project targets oil at a depth of 650 to 750 feet from Middle Pennsylvanian (Desmoinesian) age sandstone and limestone formations within the Cherokee and Marmaton Groups. The prospective oil zones range in thickness from 5 to 25 feet and may be comingled and produced from the same wellbore. The Company has already identified hundreds of prospective drilling locations on its new acreage, which has the potential to yield more than 1,000 new drilling locations.
Initial production rates from recent wells on this expansion acreage have reached as high as 20 BOPD and have averaged approximately 5 to 10 BOPD per well, which is significantly higher as compared to EnerJex's original project acreage. The Company believes this improvement is a result of lighter gravity oil, multiple productive zones, greater depth, and virgin reservoir pressure. New wells in this area cost approximately $30,000 to drill and complete, and EnerJex intends to develop this project with vertical wells on 2.5 acre spacing, utilizing water injection to sustain oil production rates and offset natural reservoir pressure depletion. Management expects this project achieve an economic life of approximately 50 years.
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