Quarterly Activities and Cashflow Report
Sydney, Jan 31, 2013 AEST (ABN Newswire) - AusTex Oil Limited (
ASX:AOK) (OTCQX:ATXDY) is an oil and gas exploration and production company with operations in Kansas and Oklahoma, in the mid-continent of the United States of America.
The Company operates leases in Oklahoma through its wholly owned subsidiaries, International Energy Corporation (Oklahoma) (IEC-OK) and International Energy Corporation (Northern Oklahoma), with offices located at 1801 East 71st Street, Tulsa. In Kansas, AusTex is the major working interest partner through its wholly owned subsidiary, International Energy Corporation (Kanas) (IEC-Kansas) with Castle Resources Inc., as operator. AusTex holds interests in 23,000 net acres in the Mississippi Lime play with daily average net production of ~540 barrels of oil equivalent per day (BOE) (70% oil) during December 2012.
1. Operations
1.1. Oklahoma
AusTex owns and operates a number of oil and gas leases in Oklahoma through its wholly owned subsidiaries, International Energy Corporation (Oklahoma) (IEC-OK) and International Energy Corporation (Northern Oklahoma). The primary focus of the Company in Oklahoma is oil and gas production growth at the 100% owned Snake River Project in Kay County with ongoing development drilling targeting the liquid rich Mississippi Lime formation.
1.1.1.
Snake River Project - 5,500 acres
Northern Oklahoma
AOK 100% Working Interest (WI) ~81.25% Net Revenue Interest (NRI)
The Snake River Project is located in Kay County, Northern Oklahoma, and east of the Nemaha Ridge. The centre of the project lies approximately 15 miles south west of Ponca City, where Conoco Philips operates an oil refinery. Mustang Gas Corporation operates an extensive gas gathering facility in the project area with gas sales lines within 1 mile of each production hub operated by AusTex. A compression and liquids stripping plant is within 1 mile of the south west boundary of the Snake River Project.
Horizontal Well Development
Hod #1-19H Well
During the Quarter, AusTex participated with Range Production Company Inc., a subsidiary of Range Resources (NYSE:RRC), in drilling the Hod #1-19H Horizontal Well on the south western edge of the project. This was the second non-operated horizontal well drilled with RRC with AOK holding an 8.33% interest. During the first 30 days of production the well averaged 151 barrels of oil equivalent (boe) per day, with a peak rate 24 hour rate of 205 boe/day.
Balder #1-30N Well
The Balder #1-30N well (AOK 13.76%) WI achieved a return on investment for AusTex of 67.24% (including drilling and operating expenses) based on the first 90 days of production revenue. With a 30-day production average 899 boe/d (70% oil) and a peak rate of 1,363 boe/d this well is one of the best producers in the area east of the Nemaha Ridge.
Additional Wells Planned
AusTex has entered into further agreements with RRC to drill up to 4 additional horizontal wells at Snake River.
Vertical Well Development Continues
AusTex, as operator, continues to development vertical wells at the Snake River Project. To date 16 wells have been drilled of which 9 wells are in production with 6 wells under completion and 1 new Salt Water Disposal well is also active. Full details of these wells are presented in the table on the next page.
- Well Economics - (refer to link below)
- Snake River Project Well Summary as at 31 January 2013:- (refer to link below)
1.1. Kansas
AusTex holds interests in oil and gas leases located in the State of Kansas through a wholly owned subsidiary, International Energy Corporation (Kansas) (IEC-Kansas). Industry Oil and gas exploration in the region has moved to an all-time high with development focusing on historically known producing zones and new exploration of possible horizontal targets including lime and shale formations previously not targeted. AusTex holds acreage in current areas of interest at very competitive rates.
1.2.1.
Cooper Project - 11,600 acres
Sheridan County - Kansas
AOK 53% WI 38% NRI
Workover operations were completed on the Clarke #1 well. The well was orginally drilled in January 2010 with an initial produciton rate of 200 bopd and is currently producing 24 bopd from the Lansing-Kansas City formation.
1.2.2.
Colby Project - 15,500 acres
Thomas County - Kansas
AOK 70% WI 58.8% NRI
The Colby Project was acquired in early 2012 and a seismic acquisition program was completed in the June Quarter. Analysis of the seismic data has now been completed and reviewed to establish possible targets. An historical well was drilled in the project in 1966 and confirmed the presence of the three target horizons being the Lansing-Kansas City, Cherokee Sand and Mississippi Lime. Using the seismic data and historical well logs multiple prospects have been generated within the acreage.
The seismic data has been reviewed by two geophysical teams with different attribute rankings and identified 19 exploration locations on 8 large closures. Any of the exploration wells could lead to multiple development wells in a closure. There will be two initial discovery wells, the Eller Chase in Section 30-8S-33W and the Steele #1 in 36-8W-33W.
1.2.3.
Ellsworth Project
Ellsworth and Rice County - Kansas
AOK 50% WI 38% NRI
During November the Ross #1 well was successfully drilled to a Total Depth of 3,375 feet. Logs, drill stem tests and samples have confirmed the presence of hydrocarbons in multiple breaks of the Arbuckle Formation
The well has now been completed for production testing.
2. Production and Revenue
Gross Revenue from operations for the quarter was $2,286,050 ($US2,383,780) with net to AusTex of $1,693,950 ($US1,766,366). Revenue for the quarter was for oil and gas sold during the months of September, October and November 2012 and received in the period 1 October and 31 December 2012.
During the three months ending 31 December 2012, cash expended for exploration and project development was $2,823,000.
Cash and short term investments on hand at end of quarter were $11,936,866.
- Table of Monthly Production:- (refer to link below)
3. Corporate Activity
3.1. Board/Administration Changes
As previously reported, Mr Russell Krause was appointed to the board on 23 October 2012. Mr Krause has 25 years' experience in Stockbroking and Investment Banking.
On 3 December 2012, AusTex advised that Non-Executive Director and Company Secretary, Mr Justin Clyne, who was appointed as a Director in September 2012, stepped aside to take a sabbatical.
Mr Tom Bloomfield was appointed as the new Company Secretary. Tom is a qualified Chartered Company Secretary, a member of the Australian Institute of Company Directors (AICD) and holds a Bachelor of Arts (BA) with Honours in Law. He is an experienced Company Secretary having acted for a number of ASX listed entities and is an experienced corporate governance specialist.
3.2. Placement to Institutional and Sophisticated Investors and Share Purchase Plan Finalised
During the Quarter the company finalised a placement and Share Purchase Plan raising a total of A$12.5 million to fund the ongoing appraisal and development of the Company's acreage in Kansas and Oklahoma. An Extraordinary General Meeting (EGM) of shareholders was held in Sydney on 26 November 2012 and Shareholders approved the 2nd Tranche of the placement and authorised the placement of the SPP shortfall.
As a result a total of 104,166,667 million new fully paid shares ordinary shares have been issued at 12 cents each.
GMP Securities acted as sole Lead Manager and were issued 10 million options exercisable at 20 cents each with an expiry date of 3 December 2015 as part payment for their services. An additional 10 million options
3.3. Analyst Coverage
During the Quarter, RBS Morgans released a spotlight note and GMP Australia released an Analyst Report on AusTex. A copy of these documents is available on the company website. www.austexoil.com
3.4. Reserve Report
An Independent Reserve Report was released to the market on 3 July 2012. The Report was prepared by Integrated Petroleum Technologies Inc., of Denver, Colorado, under the Canadian instrument 51-101 guidelines. A revision of this report is currently underway for the financial year ended 31 December 2012 and will be released during the March Quarter
- A summary of the Reserve Position is highlighted in the table below- (refer to link below).
View the complete AusTex Oil quarterly report including Tables & Figures at the link below:
http://media.abnnewswire.net/media/en/docs/ASX-AOK-717997.pdf
About AusTex Oil Limited
AusTex Oil Limited (ASX:AOK) (OTCQX:ATXDY) is a Public Company listed on the Australian Securities Exchange (ASX) and the OTCQX.
AusTex is focused on exploration and development of oil and gas leases in the USA. The company produces oil and gas in Oklahoma and Kansas and is currently developing producing leases in both states with interests in 11,600 net acres of oil and gas leases in the Mississippi Lime Play. The Company has net production of circa 800 boe/day with Independent 1P reserves certified at 3.505 Million BOE with NPV10 of US34.8 million as at 31 December 2015.
US operations are based in Tulsa, Oklahoma, with an office at 1801 East 71st Street. International Energy Corporation (Oklahoma) is a wholly owned subsidiary and a licensed oil and gas operator in Oklahoma and Kansas.
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