CALGARY, Alberta, Sept. 12, 2019 (GLOBE NEWSWIRE) -- Marksmen Energy Inc. (“Marksmen” or the “Company”) announces that it has entered into a Letter Agreement with a private oil and as company (“Third Party”) in Ohio, USA to plug back and recomplete up to 40 Rose Run formation wells in the by-passed Clinton Sandstone formation. Additionally, the Third Party agrees to grant Marksmen a right of first refusal (ROFR) to the end of December 2020 to participate in the drilling of horizontal Clinton Sandstone well(s) and vertical Rose Run wells. These wells are located in Portage County, Ohio on lands owned by the Third Party in the very well-established East Canton oilfield.
To begin the recompletion part of the program, the Third Party has provided a list of the first eight prospective wells and Marksmen has chosen the first four wells to begin the program. Marksmen will be the operator in charge of the recompletion work. After each recompletion of a well in the Clinton Sandstone formation Marksmen will have up to 30 days to begin work on the next recompletion well. Marksmen also has the right to terminate the drilling of additional wells at any time.
The target recompletion zone is the Clinton Sandstone formation (approximate depth of 4,500 feet) that was by-passed during the drilling of numerous Rose Run formation wells (approximate depth of 7,500 feet). Marksmen’s professional team in Ohio has analysed analogous well data as provided by the Third Party as well as public well records from the Ohio Department of Natural Resources (ODNR) and has determined that there are up to 40 wells which are candidates for re-completion.
The production from the Clinton Sandstone consists of Pennsylvania grade, light sweet crude, approximately 37API as well as some natural gas. All necessary surface equipment including pumpjacks, oil storage tanks, gas delivery lines, as well as downhole pumps, rods and tubing are in place at each well location.
Each recompletion is expected to cost approximately $100,000 USD and will take approximately two weeks to complete. The recompletion will consist of plugging back the existing Rose Run formation followed by perforating and hydraulically fracturing of the Clinton Sandstone formation (up to 90 feet thick).
The working interest split of each well will be 80% Marksmen and 20% Third Party until such time as 125% of all capital expenditures (“payout”) has been achieved by Marksmen. At that time, the working interest split will change to 55% Marksmen and 45% to the Third Party for the remaining economic life of each well.
Marksmen has determined that it will likely receive West Texas Intermediate (WTI) oil pricing less a small discount and natural gas at prevailing spot market prices in that region of Ohio. Royalties are estimated in the 12.5% to 15% range of revenue depending on agreements in each well.
Marksmen and the Third Party agree that they will conclude a Joint Operating Agreement (JOA) within thirty days from September 11, 2019 to detail the terms and conditions outlined in the Letter Agreement.
For additional information regarding this news release please contact Archie Nesbitt, Director and CEO of the Company at (403) 265-7270 or e-mail ajnesbitt@marksmenenergy.com.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
This news release may contain certain forward-looking information and statements, including statements regarding Marksmen's expectations of finalizing a JOA with the Third Party on the terms described in this press release, expectations of a successful recompletion program and expectations regarding anticipated costs, timing, prices of production sold and royalties relating to the recompleted wells. All statements included herein, other than statements of historical fact, are forward-looking information and such information involves various risks and uncertainties. There can be no assurance that such information will prove to be accurate, and actual results and future events could differ materially from those anticipated in such information, including the risk that Marksmen and the Third Party do not conclude a JOA on satisfactory terms, the risk that the JOA terms differ from the terms of the Letter Agreement, the risk that prices for production sold, royalties or costs differ from the assumptions described herein, and the risk that the recompletion program is not successful or is terminated at any time by Marksmen. A description of assumptions used to develop such forward-looking information and a description of risk factors that may cause actual results to differ materially from forward-looking information can be found in Marksmen’s disclosure documents on the SEDAR website at www.sedar.com. Marksmen does not undertake to update any forward-looking information except in accordance with applicable securities laws.
