The operator is working to contain the gas as soon as a tie-in to a nearby pipeline can be accomplished. The high gas pressures have not dropped sufficiently to allow the steady flow of oil to the tanks at this time. However, once the gas is contained, the company will achieve a definitive assessment of stable production rates which are indicated currently at over 200 barrels per day.
The company will report when further data on daily rates are received from the operator and will closely monitor production over the next 30 to 60 days. Predicting actual rates is approximate and the total barrels per day produced may exceed or be less than calculated therefore oil pumped to the tanks is the most accurate assessment of any early stage producer.
An oil purchase contract has been executed with NCRA (National Co-op Refinery Assoc) of McPherson, Kansas to purchase all production at the Rooney lease. The company and the operator have negotiated a premium to Kansas common oil prices reflecting the value and quality of the 44 degree oil being produced at Rooney. Also, NGPL-Midcont gas prices are currently trading in the $6.2 per MCF range.
A review of the Rooney engineering and seismic data has indicated that this newly discovered oil and gas reservoir has a potential aerial extent exceeding the acreage of existing nearby oil fields in the area that have produced in excess of 2.5 million barrels of oil.
The company said that if it is successful in its initial 10 well drill program and should the entire seismically indicated target prove productive, Rooney could mature into a full field development project offering a recovery scenario in excess of 3 million barrels of oil based on this comparative analogy.
The Rooney project is located in southwestern Ford County, Kansas 20 miles due south of Dodge City and totals 7,040 acres adjacent to the north edge of existing Morrow Sand oil and gas production.
The initial discovery well, #24-1 Double H is anticipated to begin production at rates over 200 barrels per day. After a review of the 3D seismic data in conjunction with the electronic logs, the potential barrels of oil associated well and oil pool is currently estimated at 500,000 barrels.
The company and partners have developed a minimum of 10 target locations to drill that could enable the company to add eight additional wells to its portfolio by the end of the third quarter of 2010. The operator of the project is S&W Oil & Gas of Wichita, Kansas.
