SALT LAKE CITY, UT--(Marketwired - June 29, 2015) - Stratex Oil & Gas Holdings, Inc. (OTCBB: STTX) ("Stratex" or the "Company") is pleased to provide this update on its current operations.
SANPETE COUNTY, UTAH
On August 6, 2014, work began on a well in Central Utah, known as the Moroni 11M-1107 Well, with Whiting Oil & Gas Corporation as the record Operator. The Company owns an undivided 3.00% beneficial working interest ("BWI") in this well and in an adjacent 20,000 net acre lease block located in Sanpete County, Utah. On February 14, 2015, the well was placed into production. The well has now been completed, surface production equipment is in place and flow back of the residual fracture treatment fluids is continuing, accompanied by varying amounts of oil and natural gas. Several more months may be required to flow back these remaining fluids before stabilized hydrocarbon production rates will be known.
ZAVALA COUNTY, TEXAS
On March 13, 2015, the Company entered into a Joint Development Agreement ("JDA") with Itasca Energy LLC ("IT") to drill up to 6 wells in the Buda Limestone formation on a 19,791 acre leasehold in Zavala County, Texas. The Company owns a 94.85% BWI in the leasehold. Under the JDA, IT has the potential to earn a 77.50% BWI in each of the 6 wells that is timely completed at IT's sole cost and expense, with the Company retaining a 21.34% BWI. The Company has separately retained its full 94.85% BWI in two previously drilled wells that have not yet been completed ("Excluded Wells"), as described below. If IE timely completes and pays 100.00% of all costs through the tanks for all six wells in accordance with the JDA, IT will also earn a 77.50 % BWI in the surrounding 10,314 gross acres, reduced to a 50.00% BWI in the remaining 9,333 gross acres of the Lease, with the Company's retained BWI in the remaining acreage increased to a 44.85% BWI.
The first well to be drilled under the JDA, known as the Matthews #2502 Well, was spudded on March 16, 2015, and reached total depth, including an approximately 5,200 foot horizontal in the Buda Limestone, on April 8, 2015. IT is currently conducting operations to establish production and install surface production equipment. If IT successfully establishes production of hydrocarbons in commercial quantities from this initial well and pays 100.00% of all costs of drilling and completion through the tanks, it will earn the right to drill the second well, which must be spudded, if at all, within 120 days after the initial well reached total depth on April 8, 2015. IT must meet these same requirements to earn the right to commence each subsequent well, each of which must be spudded within 120 days after the immediately prior well reaches total depth. If any of the five subsequent wells is not spudded within the required time period as described in the JDA, IT will only earn its interest in any prior well(s) that have been timely completed in accordance with the requirements of the JDA for establishing commercial production and payment of all costs through the tanks.
On March 31, 2015, the Company entered into a Commercial Term Sheet with Eureka Petroleum Corp. ('Eureka") to sell to Eureka an undivided 50% of the Company's retained BWI under the JDA with IT discussed above, increasing to an undivided 75% of the Company's retained BWI in the two Excluded Wells. The agreed purchase price is $3,300,000, together with a carry of the Company's share of all costs for completion of the two Excluded Wells. Eureka has paid a $500,000 non-refundable deposit to the Company, together with $25,000 of costs for the initial re-entry and preliminary testing of the Excluded Wells.
An additional non-refundable deposit of $600,000 is scheduled to be paid prior to June 30, 2015, with the remaining $2,200,000 of the purchase price scheduled to be paid in July, 2015. Completion operations are scheduled to commence in July, 2015, on the first of the two Excluded Wells, known as the BPH Matthews #1H Well, which was previously drilled to the Pearsall formation. Completion operations on the second of the two Excluded Wells, known as the Matthew #2501, which was previously drilled to the San Miguel formation, are scheduled to commence later this summer.
RUSSELL COUNTY, KANSAS
In May, 2015, the Company reached agreements to sell its oil and gas leases and equipment located in Russell County, Kansas, to three different independent oil producers for a combined purchase price of $360,000. The Company deemed these properties uneconomic at current oil prices. The Russell County Properties sold by the Company are located in two separate projects:
The Gorham Project, consisting of oil & gas leases covering 1,218 acres and including seven producing wells, ten non-producing wells and four salt water disposal wells.
The Trapp Project, consisting of oil & gas leases covering 160 acres and including one producing well, one non-producing well and one salt water disposal well.
As of June 9, 2015, the Company had received $285,000 for two initial closings. The remaining $75,000 of the purchase price will be released to the Company, or paid to third party vendors for the Company's benefit, at the final closing scheduled for July 7, 2015.
The Company continues to own and operate 807 gross acres (772 net acres) in Kansas which include seven producing wells, five shut in wells and 3 salt water disposal wells.
About Stratex Oil & Gas Holdings, Inc.
Stratex Oil & Gas Holdings, Inc. is an independent energy company focused on the acquisition and subsequent organic exploitation and development of primarily crude oil properties in Texas and Kansas, as well as two proprietary and distinct projects in Utah, which include a massive shale development play and a world class exploration project, located along the Central Utah Overthrust. The Company also owns smaller operated and non-operated working interests in North Dakota, Colorado, Utah and Montana. Stratex is fully committed to the creation of long term value for all of its stakeholders. For more information visit: www.stratexoil.com.
Forward Looking Statement
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. Such forward-looking statements involve known and unknown risks and uncertainties, including risks associated with the Company's ability to obtain additional capital in the future to fund planned expansion, the demand for oil and natural gas, general economic factors, competition in the industry and other factors that could cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. The Company is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements whether as a result of new information, future events or otherwise.