Start Scientific, Inc. (STSC) Activity On Par with Long-Term Oil & Gas Objectives
Start Scientific specializes in the exploration, drilling, extraction and delivery of sweet crude oil, taking specific interest in shallow, deep and horizontal opportunities overlooked by mid-sized oil and gas companies. The company is currently focused on developing leases and establishing joint-venture partnerships for its four primary projects in Mississippi, Texas, North Dakota and West Virginia. Start Scientific pounced on two farmout opportunities at the first of the year, starting 2015 with strengthened activity in Mississippi.
Per a farmout agreement signed in early January with BPS Operating Services, Start Scientific plans to re-enter and complete 33 old wells, as well as drill horizontal holes on the top of the structure and testing two zones at the Flora Field north of Jackson, Mississippi. Discovered in 1943, the field has produced more than 7.6 million barrels of oil. Five wells are currently producing roughly 30 barrels of oil per day.
Start Scientific has until April 1, 2015, to tender $500,000 for the first well to be drilled in the Flora Field. The production interest encompasses 40 acres around the new well, for which Start Scientific will earn a 75% working interest before payout and a 60% working interest after. The company may drill additional wells for $400,000 per well within 60 days of completing each previously drilled well.
In late-January Start Scientific signed a farmout agreement with Durban Energy, Inc., located in Jackson, Mississippi. The deal gives Start Scientific until July 10, 2015, to start drilling a new well on the farmout acreage in Fayette Field. The field was discovered in 1945 with the completion of the No. 1 M.R. Smith well, which produced 630,288 barrels of oil and 2.3 billion cubic feet of gas.
Under this agreement, Start Scientific is set to receive 100% of the net revenue until payout of all costs, at which time the company will assign a 25% working interest to Durban and partners. Accounting for a 30% royalty burden on the leases, Start Scientific will have 70% of net revenue. After payout, the company will have 52.5% of net revenue and Durban will have 17.5% of net revenue.
The Fayette and Flora farmouts are part of the company’s long-term focus to grow and develop its leasehold portfolio with new interests as well as older wells that, through the application of newer technologies, may increase production and reserves.
For more information, visit www.startscientificoil.com
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