EnerJex Resources, Inc. (ENRJ.OB) ("EnerJex" or the "Company"), a domestic onshore oil company, announced today that it has completed 7 new oil wells and 1 new secondary recovery water injection well in its Mississippian Project located in Southeast Kansas. Year-to-date, the Company has drilled 12 new oil wells and 1 new injection well with a 100% success rate. Nine of the 12 new oil wells have begun producing and the remaining wells are expected to be placed online in the near term.
Results from this drilling program have exceeded management's expectations, and production from this project has increased by 50% since the end of 2011 to approximately 150 barrels of oil per day. EnerJex intends to accelerate its drilling program in this project, where it has identified approximately 500 additional low-risk oil drilling locations.
In addition, the Company intends to implement secondary recovery throughout its entire Mississippian Project, where management has identified hundreds of water injection drilling locations. Secondary recovery, also known as waterflooding, is a method by which water is injected into the producing oil formation in order to increase reservoir pressure and drive oil to the nearby producing wellbores. This process is typically implemented by drilling one water injection well in the middle of every four oil production wells.
The Mississippian formation has responded very favorably to water injection in the project area, resulting in oil production increases of up to 1,000%. Management estimates that EnerJex's Mississippian Project acreage has produced approximately 5.3 million barrels of oil since 1920, and believes it is an ideal candidate for secondary recovery. EnerJex drilled a limited number of water injection wells on two leases in this project during 2011. Oil production from these leases began increasing approximately 6 to 9 months after water injection was initiated, and oil production from both leases continues to rise.
EnerJex's CEO, Robert Watson, Jr., said, "I am very pleased with the results of EnerJex's Mississippian drilling program, which more than validate our confidence in this project's ability to drive significant near term growth in the Company's oil production, reserves, and cash flow. This project affords EnerJex with hundreds of low-cost, low-risk development drilling locations that provide exceptional return on capital employed, and I have never been more excited about the Company's future."
EnerJex Resources announces oil production increase