By connecting the two lines, Cavu can develop the 1,700 acres and also purchase gas from multiple producers who have scores of shut in wells in the area that are not currently able to bring their production to market.
William Robinson, president of Cavu Resources, said: “One of our core strategies is to be independent so that we are not forced to rely on other companies for services, transportation of our product (oil/gas) or drilling of our wells.
“In this particular case, we felt that having the opportunity to connect 60-70 miles of pipeline provides us with two things. First, it gives us ample capacity to develop thousands of acres of oil and gas leases. Secondly, it provides us with the ability to purchase enough third party gas that we could eventually fund a majority of the development of our own acreage from that cash flow,” he added.”
The 49 mile segment of line is part of an old existing 10″ steel petroleum pipeline that used to transport oil from Bartlesville and other oil fields in northeast Oklahoma to refineries on the outskirts of Tulsa. The original petroleum pipeline was sold off in segments to companies during various downturns in the oil industry over the years. As part of Cavu’s acquisition, it will obtain the geological, engineering and field development plans that cover 1,700 acres of leases along parts of the pipeline.
Before any new wells are drilled, Cavu plans to connect this segment of line to its existing infrastructure in the Hogshooter Project so that gas can be sold through its existing tap outside of Nowata, Oklahoma. However, Cavu is already beginning the process of assessing the geological and engineering reports on the acquired 1,700 acres to determine if the recommended drilling locations are where the company would want to begin drilling.
In this area of Oklahoma referred to as the Northeast Oklahoma Shelf, there are multiple traditional reservoirs that can be tested for hydrocarbons as well as several coal bed methane (CBM) zones that are charged with methane gas.
