Kash Jackson
06-03-2009, 08:34 PM
Watching this one to pick up over the next few days. Buzz play so lets see how it turns out. Heres some DD to get you started.
We entered into an Acreage Participation Agreement effective January 23, 2006, with REO Energy, Ltd. as a holder of approximately 2,000 acres of mineral leases in and around Montague County, Texas (the "Gross Area"). We purchased 50% of the REO Energy’s leasehold interest in the Gross Area (the "Assigned Acreage") for $300,000. We are also entitled (i) to receive a 1% overriding royalty on the entire Gross Area, (ii) to participate in up to a 25% working interest in wells drilled in the Gross Area, and (iii) to receive an acreage fee of $500 per acre from all wells drilled on the Assigned Acreage.
Additionally, we acquired a 10% working interest in four wells (Inglish 4, Inglish 5, Inglish D1 and Inglish D2) and a 5% working interest in two wells (Craig Muncaster 6 and Craig Muncaster 7) drilled by REO Energy Ltd. on Barnett Shale formation leases. We subsequently transferred 50% of our working interests in these wells to Quantum Energy, Inc.; however, we later terminated our agreement with Quantum Energy and currently hold our original working interests in these wells.
The funds advanced under this contract, USD$750,000, were applied towards the acquisition of a 10% working interest in four wells ( Inglish 4, Inglish 5, Inglish D1 and Inglish D2) and a 5% working interest in two wells (Craig Muncaster 6 and Craig Muncaster 7) drilled by REO Energy Ltd. on Barnett Shale formation leases. All of these wells are currently completed and producing.
Oklahoma Property
On December 18, 2006, we acquired three producing leases in Oklahoma for $250,000. The funding for this acquisition was derived from a private placement of 500,000 shares of our common stock and warrants to purchase 500,000 of our common stock to Bridge Capital Inc., a private offshore corporation.
The three leases, East Moreland, West Moreland and Farley are described as follows:
East Moreland and West Moreland Leases are in Nowata County, Oklahoma. The leases are in total of 160 acres. Nitro owns 100% of the interest on these leases, which represents 78 % revenue interest. There are four wells on these leases, all of which are producing. The aggregate production is seven barrels per day. There is no gas being produced by these wells. There no future drilling commitments at this time.
Farley Lease is also located in Nowata County, Oklahoma. It is an 80 acres lease. We own 100% of the interest on these leases, which represents 78 % revenue interest. There are three wells on this lease, all of which are producing. The aggregate production is three barrels per day. There is no gas being produced by these wells. There no future drilling plans or commitments at this time.
On February 1, 2008, we purchased producing properties located in Garvin County and Pottawatomie County, Oklahoma in a transaction that resulted in the distribution of 1,306,054 shares in exchange for an 18.75% to a 24.75% gross working interest in producing wells and in undeveloped proved properties. The Sarah No. 1-4, Teresa No. 1, Thompson No. 1-18, Ward/McNeil and Mason-Burns wells are all located in Garvin County. The Quinlan well is located in Pottawatomie County.
We acquired the Crown No. 1, No. 2 and No. 3 and the Gloria SWD wells located in Pottawatomie County, Oklahoma, on February 1, 2008 and turn keyed the rework of these wells to outside investors, retaining a 15% carried working interest and operations of the wells.
On April 8, 2008, we acquired the 10% of the Jessica No. 23, located in Seminole County, Oklahoma.
During 2008 we drilled the Quinlan No. 3 and the Quinlan No. 4, both located in Pottawatomie County, Oklahoma, retaining a 15% carried working interest in both wells. The Quinlan No. 4 was later converted into a saltwater disposal well. We also reworked the Quinlan No. 2, located in Pottawatomie County, Oklahoma, initially as a saltwater disposal well, but later converted it into a producing well. We own a 29.8% working interest in this well.
On February 1, 2008, we acquired a 50% working interest in the Nancy Hubbard, Walker, State SWD and Krouch 1 and 2 leases, all located in Pottawatomie County, Oklahoma. We have performed major rework on these leases during the latter part of the year. Our acquisition of these properties was made available through the sale of part of the 50% working interest to other outside investors. We ended up with a little less than a 5% working interest and still retained operations of these leases.
We entered into an Acreage Participation Agreement effective January 23, 2006, with REO Energy, Ltd. as a holder of approximately 2,000 acres of mineral leases in and around Montague County, Texas (the "Gross Area"). We purchased 50% of the REO Energy’s leasehold interest in the Gross Area (the "Assigned Acreage") for $300,000. We are also entitled (i) to receive a 1% overriding royalty on the entire Gross Area, (ii) to participate in up to a 25% working interest in wells drilled in the Gross Area, and (iii) to receive an acreage fee of $500 per acre from all wells drilled on the Assigned Acreage.
Additionally, we acquired a 10% working interest in four wells (Inglish 4, Inglish 5, Inglish D1 and Inglish D2) and a 5% working interest in two wells (Craig Muncaster 6 and Craig Muncaster 7) drilled by REO Energy Ltd. on Barnett Shale formation leases. We subsequently transferred 50% of our working interests in these wells to Quantum Energy, Inc.; however, we later terminated our agreement with Quantum Energy and currently hold our original working interests in these wells.
The funds advanced under this contract, USD$750,000, were applied towards the acquisition of a 10% working interest in four wells ( Inglish 4, Inglish 5, Inglish D1 and Inglish D2) and a 5% working interest in two wells (Craig Muncaster 6 and Craig Muncaster 7) drilled by REO Energy Ltd. on Barnett Shale formation leases. All of these wells are currently completed and producing.
Oklahoma Property
On December 18, 2006, we acquired three producing leases in Oklahoma for $250,000. The funding for this acquisition was derived from a private placement of 500,000 shares of our common stock and warrants to purchase 500,000 of our common stock to Bridge Capital Inc., a private offshore corporation.
The three leases, East Moreland, West Moreland and Farley are described as follows:
East Moreland and West Moreland Leases are in Nowata County, Oklahoma. The leases are in total of 160 acres. Nitro owns 100% of the interest on these leases, which represents 78 % revenue interest. There are four wells on these leases, all of which are producing. The aggregate production is seven barrels per day. There is no gas being produced by these wells. There no future drilling commitments at this time.
Farley Lease is also located in Nowata County, Oklahoma. It is an 80 acres lease. We own 100% of the interest on these leases, which represents 78 % revenue interest. There are three wells on this lease, all of which are producing. The aggregate production is three barrels per day. There is no gas being produced by these wells. There no future drilling plans or commitments at this time.
On February 1, 2008, we purchased producing properties located in Garvin County and Pottawatomie County, Oklahoma in a transaction that resulted in the distribution of 1,306,054 shares in exchange for an 18.75% to a 24.75% gross working interest in producing wells and in undeveloped proved properties. The Sarah No. 1-4, Teresa No. 1, Thompson No. 1-18, Ward/McNeil and Mason-Burns wells are all located in Garvin County. The Quinlan well is located in Pottawatomie County.
We acquired the Crown No. 1, No. 2 and No. 3 and the Gloria SWD wells located in Pottawatomie County, Oklahoma, on February 1, 2008 and turn keyed the rework of these wells to outside investors, retaining a 15% carried working interest and operations of the wells.
On April 8, 2008, we acquired the 10% of the Jessica No. 23, located in Seminole County, Oklahoma.
During 2008 we drilled the Quinlan No. 3 and the Quinlan No. 4, both located in Pottawatomie County, Oklahoma, retaining a 15% carried working interest in both wells. The Quinlan No. 4 was later converted into a saltwater disposal well. We also reworked the Quinlan No. 2, located in Pottawatomie County, Oklahoma, initially as a saltwater disposal well, but later converted it into a producing well. We own a 29.8% working interest in this well.
On February 1, 2008, we acquired a 50% working interest in the Nancy Hubbard, Walker, State SWD and Krouch 1 and 2 leases, all located in Pottawatomie County, Oklahoma. We have performed major rework on these leases during the latter part of the year. Our acquisition of these properties was made available through the sale of part of the 50% working interest to other outside investors. We ended up with a little less than a 5% working interest and still retained operations of these leases.