Redco Oil & Gas Inc

Redco Oil & Gas Inc. has retained Simplex Energy Solutions LLC to market the sale of its leasehold interest in the University Block 4 Queen Unit in Andrews County, Texas.

Redco has 100% working interest (75% net royalty interest) in the 2,243 acreage unit, which produces about 33.3 barrels of oil per day and generates about $31,167 per month in net income. Redco is advertising production wells which have remedial stimulation opportunities and drilling and infill potential. The acreage is about five miles northeast of Andrews, Texas in the McFarland Queen Field.

Formed in 1990, the unit has operated under "depletion mode" since the mid-1990s with almost no stimulation being conducted, nor make-up water applied. Injection pressure is held to 1,400 psi using an injection header bypass, but underutilizing the allowed permit pressure of 2,000 psi. As a result, there are many opportunities to stimulate and optimize injection and production.

A review of the well logs (phi-h analysis) points the way to some interesting drilling possibilities, especially in the northwest portion of the unit. Redco's historical production review reveals almost identical cumulative production performance of 40-acre waterflood development to 20-acre development for approximately the same producer well count, peak rate, decline character, and duration.

Most of the waterflood infrastructure is still in place and can be upgraded or expanded for revitalization. Today there are 26 active producers, 26 active injectors, 9 SI/TA'd producers, and 4 SI/TA'd injectors.