CAVU Resources, Inc. Completes the Second Phase of Chisholm Lease Rework
15 March 2011 - 7:24AM
Marketwired
CAVU Resources, Inc. ("CAVU"), which trades as (PINKSHEETS: CAVR),
announced today the completion of its second phase of the Chisholm
Lease rework.
Garvin County, OK - Chisholm Lease Project
The Chisholm Lease Project is located in an area that stretches
from Paul's Valley to the Texas/Oklahoma state line and covers
approximately 290 square miles. The area contains over 90 wells
that were drilled between the late 1970's and early 2000's. Most of
these wells are currently shut-in and can be secured, reworked and
systematically put back into production starting with ones closest
CAVU's existing lease.
CAVU currently owns 190 acres with 9 existing wells, 4 of which
were reworked in 2009, 2010 and 2011. By using this approach, CAVU
could eventually work its way through the area consisting of more
than 3,000 acres and 90 additional shut-in wells, of which 30 are
known to be commercially viable wells that could be put back into
production at an estimated cost of approximately $188,000 per well.
CAVU has invested along with its partners approximately $1.8
million dollars in this existing project. Some of these wells also
have other potentially productive intervals that could be
perforated and co-produced utilizing horizontal drilling based on
similar projects could possibly increase cumulative production to
as much as 300 BOPD.
Chisholm Project
- Located about 1.5 hours south of Oklahoma City, OK
- In the historically prolific Washita River Valley
- Established oil and gas field
- Numerous historical wells completed in basal creek and oil
creek zones
- 87%+ success rate when drilling for oil in these zones
- Nine wells on the lease have multiple production zones
- The Layton at 2800'
- The McKinney at 2950'
- The Burns at 3025'
- The Second Bromide at 3050'
- The Tulip Creek at 3100'
- The McLish at 3200'
- The Upper Oil Creek sand at 3680'
- The Arbuckle at 3900'
- Most wells on the lease have produced from the Burns, Second
Bromide, McLish and Oil Creek
- Estimated cumulative production for a well completed in the
Basal Oil Creek sand is between 50,000 and 350,000 barrels of oil,
with total recoverable in all zone estimated to be 350,000 to
500,000 barrels of oil
CAVU has replaced the gathering system, wells, tanks, and
production equipment, with planned future leases and new wells to
be consolidated at CAVU's facilities. CAVU has already completed
the rework of 3 production wells and the rework and increased
volume permits on the current disposal well that can later be
converted to a producing well. The 3 existing wells had recent
servicing (cleaning out the well bores, acidizing the perforations
and in some cases perforating new potentially productive
reservoirs). It should be noted that of the 2 wells that have been
in production since 2009, one well tested at about 35 BOPD and
another at 10 BOPD with one well being acidized and new tubing
valves and pumps. Currently the company is completing another
producing well that has tested at 10 to 20 BOPD scheduled to be in
production in the next two weeks.
While service work is being done on these wells and new wells
are planned to be drilled, the CAVU land team plans to begin
working with people in the area who have shut-in wells on their
land. There are more than 50 of the known 90 viable wells that are
contiguous to this acreage position and within immediate range of
the CAVU gas gathering capabilities. Preliminary talks suggest that
a majority of these shut-in wells can be acquired at a huge
discount to their value so long as CAVU can get them into operation
within a few months. If CAVU were to be successful in
systematically working its way out towards wells beyond these
initial 50 wells, there are also about another 200 other wells in
the general area that are shut-in with most believed to be
commercially viable.
CAVU believes that within 12 months of acquisition of 30-50
shut-in wells that the commercially viable wells can be turned on,
which is estimated to result in additional production ranging
anywhere between 300-700 BOPD in production. Management is
utilizing conservative forecasts of 700 BOPD for production rates
after drilling the new wells and putting these 30-50 wells into
production.
Project Strengths
The positive aspects for developing shallow gas and oil
production in this area are:
- Location to strong and insulated gas markets with taps into
major pipelines, ample infrastructure and good availability of
service companies.
- Multiple pay zones at shallow depths with several zones that
blanket the area, making it feasible to complete a well nearly
every time one is drilled while keeping drilling risk low.
- Land is predominantly fee simple with pro-industry regulators
who encourage exploration.
CAVU plans to submit additional updates on production and its
other producing and speculative leases as well as yearend
financials and updated information statements by the end of
March.
About CAVU Resources, Inc.
During World War II, Navy fighter pilots would look up at the
sky and if it was a "CAVU" day then it meant ceiling and visibility
unlimited. The pilots believed they would have unobstructed flying
allowing them to see their targets quicker, identify the obstacles
they needed to overcome, giving them a greater chance of success.
The founders of CAVU Resources, Inc., chose the name CAVU because
they believe that the company will be the embodiment of its
name.
CAVU was formed with the goal of becoming a recognized regional
player in the independent oil and natural gas industry by growing
the company's oil and natural gas reserves. CAVU is a natural
resource company engaged in the acquisition, exploration and
development of oil and natural gas properties. The Company operates
in the upstream segment of the oil and gas industry with planned
activities including the drilling, completion and operation of oil
and gas wells in Oklahoma, Kansas, Colorado and Texas. The Company
also owns two pipelines in its area of operations, which will be
used for gathering its gas and oil and the gas and oil production
of other producers. The Company has acquired leases and is
currently exploring additional opportunities in oil, gas and helium
leases. The company has acquired significant oil and gas equipment
including rigs, trucks and completion equipment.
CAVU's 100% owned subsidiaries, CAVU Energy Services, LLC
provides contract drilling, fracture stimulation and directional
drilling services to oil, natural gas exploration and production
companies. EnviroTek Fuel Systems, Inc., provides natural gas
delivery and marketing thru its own pipelines, FILO quip Resources,
LLC a licensed Oil and Gas Operating Company manages the company's
properties and leases in Oklahoma, Colorado and Montana. CAVU plans
to expand operations not only in the traditional Oil and Gas
business, but also to invest in Geo-Thermal, Wind, taking advantage
of the changing environment and in the world's need for new, green
and innovative resources. More information is available at the
company's website at http://www.cavu-resources.com.
Cautionary note: This report contains
forward-looking statements, particularly those regarding cash flow,
capital expenditures and investment plans. Resource estimates,
unless specifically noted, are considered speculative. By their
nature, forward-looking statements involve risk and uncertainties
because they relate to events and depend on factors that will or
may occur in the future. Actual results may vary depending upon
exploration activities, industry production, commodity demand and
pricing, currency exchange rates, and, but not limited to, general
economic factors. Cautionary Note to U.S. investors: The U.S.
Securities and Exchange Commission specifically prohibits the use
of certain terms, such as "reserves'' unless such figures are based
upon actual production or formation tests and can be shown to be
economically and legally producible under existing economic and
operating conditions.
Contact: CAVU Resources, Inc.
info@cavu-resources.com (PINKSHEETS: CAVR) 5147 South
Harvard Ave, Suite 138 Tulsa, OK 74135 Tel: 505-722-7402 Fax:
918-782-0776
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