The company said there were two sales connections for each lease.
“At the turn of a valve the operator can change purchasers,” Amadeus said.
“A new contract has recently been negotiated that yielded a significant improvement in the net gas price.”
This group of properties was characterised by low decline rates, multi-pay wellbores and low operating costs, according to Amadeus.
“Our 3D seismic has identified multiple exploration targets,” Amadeus company secretary Caroline Bentley told EnergyReview.net this morning.
“The area is gas-prone, with a current 80/20 gas/oil split, but we’ll take whatever we can get.
“Upside potential on the deal will significantly add to Amadeus’ production and reserve position over the next financial year and further reinforces the company’s policy to focus on a balance between acquiring producing oil and gas assets and drilling on exploration activities in the US.”
Production is from various formations including the Strawn, Caddo Lime, Conglomerate, Marble Falls, Lake Sand, Duffer Lime, Mississippian Reef and Ellenberger.
The Barnett Shale is present above the Ellenberger but has not been produced in the area, despite it productivity elsewhere in the Fort Worth Basin.
Several wells have penetrated the Barnett Shale and mud logs typically exhibit 400 to 500 units of gas during penetration, according to Amadeus.
“Until recently, the Barnett had not been thought of as a viable commercial producing formation [but] it is present over almost the entire County and ranges up to 300 feet thick in places,” the company said.”
Producing depths range from 2,800 to 4,500 feet. Amadeus owns all depth rights in the area of interest. 3D and 2D seismic is available on six of the leases.
There are four Duffer locations to be drilled during 2005/06 and opportunities exist to drill further wells on leases with 160 acres more more well spacing, Amadeus said A further 32 wells can be drilled if spacing is reduced down to 80 or 40 acres.
According to Amadeus, net 100% working interest operating income averaged $US340,000 per month from October 2004 to March 2005, split 80% gas and 20% oil.
Current gross production is 1.7 million cubic feet per day and 70 barrels of oil per day. Proved, developed producing reserves acquired total 550,000 barrels and 6.2 BCF of gas.
Interests are: Amadeus share 81% working interest (net revenue interest 65.6%) and operator TNT Engineering 10% working interest, with the remainder being shared between various senior employees.
