Treaty Energy Corp. (OTCQB: TECO) plans to drill two new oil wells on the Stockton lease in Tuscola, Texas. On June 28, Treaty Energy acquired a working interest on the Stockton and Murl leases from US Fuels of Breckenridge, Texas. Treaty Energy will drill two wells on the Stockton lease. These two new wells will be named the Stockton #3 and #4.
On July 17, Treaty Energy completed survey work on the Stockton #3 and #4 wells. Through US Fuels, Treaty Energy will file applications for drilling permits within 48 hours to the Railroad Commission of Texas.
The Stockton #3 and #4 wells are considered offset wells from the just completed Mitchell #4. The projected cost to drill and complete each well is approximately $375,000 (AFE). Initial production numbers and estimated production rates are expected to be similar to the Mitchell #4 well, which received an initial production rate of 61 barrels of oil per day (BOPD) and an announced production rate of 45-50 BOPD.
Treaty Energy will not have any partners on the two Stockton wells and will have a 75% net revenue interest. The company has sufficient funds committed to complete these two wells. Well operations and drilling oversight on the Stockton lease will be handled by David Jackabot, owner of US Fuels. In addition to these new wells, US Fuels will manage all other Treaty Energy well operations in Texas starting now, and will continue to operate the wells into the foreseeable future.
Andrew Reid, CEO for Treaty Energy, stated, "The success of the Mitchell project showed to management and shareholders alike that a new Treaty Energy has emerged since operational changes were made earlier this year. Management hopes to further the company's success by drilling these two wells on the Stockton lease. While the company initially planned on drilling only one offset well, positive results from the Mitchell lease prompted the company to take action to increase production quickly and move the company toward cash flow positive in the third quarter of 2013."
Treaty Energy is an international energy company engaged in the acquisition, development and production of oil and natural gas. The company acquires and develops oil and gas leases that have "proven but undeveloped reserves" at the time of acquisition.