Treaty Energy Corp. (OTCQB: TECO) has sold a large portion of its existing marginal oilwell assets in West Texas for $550,000 as part of its long-term reorganization strategy to decrease expenses and improve operational efficiency. The company also announced its plan to acquire a new well as part of its program to develop the Tuscola, Texas, area.
Based on the results of an internal review, Treaty Energy has been seeking buyers for 11 marginal well leases in West Texas for $550,000 as part of the company's long-term reorganization strategy. In late March 2013, the Willingham, A.J. lease was sold for $50,000 and the Wooldridge, Mack H. was returned to its previous owner due to its low performance.
In April, Treaty Energy received an offer to purchase all remaining West Texas assets. Under this offer, the purchaser would operate the leases until the sale was completed. The deal fluctuated over time, with leases being rescinded and re-offered. On August 13, a deal was finalized with Heritage Oil & Gas of Flower Mound, Texas. Heritage Oil & Gas has purchased the remaining nine leases for $550,000. This payment will be made over next three months. Treaty Energy will be reinvesting this money to fund future oil and gas development in the Tuscola, Texas region and pay off some outstanding liabilities.
Treaty Energy maintains operations in Tuscola, Texas, on the Mitchell, Standard, and Stockton leases. It also maintains operations in East Texas on the Lakeshore and Madeley leases.
C&C Petroleum Management LLC, the company's Texas-based oil and gas operating subsidiary, began the process to acquire the Stockton #1 well from Tanglewood Productions in Breckenridge, Texas. The company has made a down payment of $25,000 and is expected to complete the sale by the end of the month.