AusTex Oil Limited (ASX:AOK) To Acquire 907 Acres For Oil Exploration In Kay County, Oklahoma
Sydney, July 29, 2010 AEST (ABN Newswire) - AusTex Oil Limited (
ASX:AOK), is pleased to advise that it has entered into a Letter of Intent to acquire ~907 acres in Kay County, near the town of Tonkawa, Oklahoma and in an area of aggressive development of oil projects by a number of operators.
The current owners have maintained minimal production of oil and gas on the lease which has extensive infrastructure in place including oil and gas gathering systems, storage facilities and gas sales lines along with two operating disposal wells.
The agreement is subject to final due diligence and Board approval with a proposed closing of 30 September, 2010. If the acquisition proceeds AOK will hold a 100% Working Interest and 81.25% Net Revenue Interest and would be the operator of the project. The acquisition will be funded from existing capital and is expected to be finalised this quarter. Additional acreage available for leasing is being reviewed.
Speaking from Tulsa, Managing Director of AOK, Mr Dan Lanskey commented, "This proposed acquisition complements our existing development in Oklahoma in known proven oil fields. We are already operating leases west of Tulsa and this project could be developed with existing staff and contractor relationships. Onshore development and exploration for oil in Oklahoma is hotting up with 132 rigs onsite in the State according to current information from RIGDATA".
Area of Development
Kay Countyis located in north-east Oklahoma, 100 miles north-west of Tulsa City. The area is a known oil producing region with laterally extensive multiple oil bearing horizons. Current exploration and development in the immediate area includes horizontal drilling in the Mississippi Limestone formation between 4000 feet and 5000 feet from surface. Initial production rates of 500 barrels of oil per day are being achieved with an average well cost of A$1.5 million.
About Australian Oil Company Limited
Australian Oil Company Limited (ASX:AOK) (OTCMKTS:SGCSF) is an Australian-based energy company focused on under-explored, recently over-looked, world class oil and gas opportunities near under-supplied markets. The Company is currently focussed on conventional oil and gas exploration and production in the Sacramento Basin in California. Australian Oil has a portfolio of natural gas and oil producing wells in addition to prospects and discoveries at various exploration and appraisal stages. AOK is in the process of evaluating the acquisition of oil and gas producing and exploration assets to enhance the Company's strategic needs and deliver shareholder value.
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