KKPT News Research KOKO Petroleum, Stock Trading Message Board
KOKO Petroleum, Inc. to Participate in Barnett Shale Drilling Program
KOKO Petroleum, Inc. (PINK SHEETS: KKPT) announced today that it has taken a minority participation working interest in the Boyd No. 1 well in the Barnett Shale play, north of Fort Worth, Texas. This well is the first in a planned program to exploit oil and gas reserves from leasehold interests held in the Barnett Shale play located in Cooke, Wise and Montague Counties, Texas.
The Barnett Shale is the largest natural gas play in Texas. It is presently producing 900 MMCF of gas per day and is considered one of the largest U.S. domestic natural gas plays with sizable, remaining resource potential. The first Barnett Shale wells were drilled and completed in the early 1980s by Mitchell Energy of Houston, Texas. According to an in-depth 2004 sector report on the Barnett Shale, developed by Morgan Stanley (NYSE:MWD), the Barnett Shale play is estimated to hold reserves in the non-core area that could be as high as 150 BCF per 1,000 acres. The report estimated that because of the amount of gas available in the area, successful wells in the Barnett Shale should be economically viable in almost any gas price environment. There are 75 rigs currently operating in the area.
Under the terms of the participation agreement with Rife Energy Operating, Inc. (the program's operator), KOKO Petroleum has acquired a minority working interest (approx. 10%) in the drilling and completion of one well (Boyd No. 1) that has already been drilled to an approximate depth of 8,800 feet. This well is now in the completion stage and is expected to go on-line in approximately 45 days. The total cost for drilling and completion of the McCoy No. 2 well is anticipated to be approximately $1.4 million.
"Petroleum and natural gas production in the Barnett Shale play has been increasing steadily year after year. This is by far one of the most active and prolific gas fields in America right now and as such is garnering a lot of attention all the way from the oil patch to Wall Street. The group that we have joined in this Barnett Shale drilling program is affiliated with one of the major stakeholders in the area with scores of wells already in production. We are very confident in their proven ability to locate the best drilling sites in the area and to efficiently tap the vast gas resources held in Barnett Shale. This project is one of several next steps in KOKO Petroleum's ongoing program to build a diverse portfolio of promising oil and gas properties and prospects. We plan to continue pursuing other promising prospects that should help us build a diverse portfolio with long-term value for our shareholders," says Mr. Ted Kozub, Chief Executive Officer of KOKO Petroleum, Inc.
KOKO Petroleum Inc.: Corporate Update
KOKO Petroleum Inc. (PINK SHEETS:KKPT) announced today that is has funded the first phase of the Redevelopment Program for its Corsicana Project with JMT Resources, Ltd. Fort Worth, Texas. KOKO will participate in the Development of JMT's Corsicana Field, which will implement Enhanced Oil Recovery (EOR) technologies on its 4,000 acre leasehold located in Corsicana, Texas.
The primary EOR technology to be applied to the Field is an alkaline-surfactant-polymer (ASP) flood. This technology has proven to be very effective in partially-depleted fields, especially with shallower Fields that typically inhibit the effectiveness of the more common EOR technologies. This technology essentially "pushes" fluid to the well-bores instead of creating a pressurized environment that would cause the oil to move. Pressurizing mature fields has been problematic in the past and the ASP flood avoids many the issues surrounding re-pressurization.
The Redevelopment Program will commence operations immediately and focus on plugging wells in the Pilot Project Area. JMT has indicated that the initial drilling will occur within 30 days. Due to the time it takes to engineer the ASP flood, which can only be done after the first wells are cored and analyzed, JMT has indicated that the actual flood will take up to 6 months to implement, however, all of the wells drilled will immediately be put into production and generating revenue.
Texas Railroad Commission field rules state the requisite spacing on the Corsicana Field is 2 acres. The KOKO/JMT polymer flood program could potentially involve 1000 producing and 1000 injection wells on the property.
Ted Kozub, President and CEO of KOKO stated, "We are very excited to get this project off the ground and feel that it has the potential to create enormous value for our shareholders. We have structured an agreement that allows to us to participate in the upside of this great field while mitigating our downside risk and thus protecting our shareholders from any loss in value."
In 1988, Tejas Petroleum Engineers prepared an engineering study on the field that estimated the original amount of oil in place in the Corsicana Field was approximately 24,000 barrels of oil per acre. JMT's current acreage block therefore contained 95 million barrels of original oil in place, of which approximately 13% has been produced.
Geological engineering studies have shown that an effective ASP flood could yield as much as 30% to 40% of the original oil in place with lifting costs below $7 per barrel.
KOKO Petroleum Inc. Signs Letter of Intent-Texas
KOKO Petroleum Inc. (PINK SHEETS:KKPT) announced today that it has signed a Letter of Intent with JMT Resources, Ltd. Fort Worth, Texas. KOKO will participate in the Development of JMT's polymer flood pilot program on its 4,000 acre leasehold located in Corsicana, Texas.
The pilot program consists of implementing a polymer based flood in a specific area of JMT's acreage. The 4,000 acre leasehold, known as the Corsicana Field is the oldest oil field in Texas and was discovered in the 1890's by a company that eventually became Mobil Oil.
Due to the production techniques utilized to recover the 20 million barrels of oil (inception to date), which were archaic considering the tools available today, only a small portion of the total oil in place has been recovered. Implementing an alkaline-surfactant-polymer (ASP) flood will cause oil to be "pushed" towards the well bore by creating pressure and fluid movement. In 1988, Tejas Petroleum Engineers prepared an engineering study on the field that estimated the original amount of oil in place in the Corsicana Field was approximately 24,000 barrels of oil per acre. JMT's current acreage block therefore contained 95 million barrels of original oil in place, of which approximately 13% has been produced.
Geological engineering studies have shown that an effective ASP flood could yield as much as 30% to 40% of the original oil in place with lifting costs below $7 per barrel.
KOKO Petroleum Inc. has committed to fund an ASP pilot program in the Corsicana Field, which will cost $1.5 million USD to engineer and implement and consist of drilling approximately 13 wells and subsequently flooding the identified area with ASP. IF successful, KOKO will have the right to participate in the development of the entire field as an equal partner with JMT. KOKO will be responsible for raising the necessary capital to develop the entire field, which is estimated to cost between $7 to $10 million USD.
In addition, the agreement entitles KOKO to conduct 3D seismic on the entire acreage to identify possible deep structures for exploration.
Ted Kozub CEO of KOKO Petroleum Inc. stated the following; "KOKO has an opportunity to become involved with veteran oil people in the development of this field that combines technology with vast resources. We have created a structure that mitigates our downside risk while exposing us to tremendous upside potential. This is an important step in KOKO Petroleum's financial development and we feel it will translate to significant shareholder value."
KOKO Petroleum Inc.: Corporate Update
KOKO Petroleum Inc. (PINK SHEETS:KKPT) -
The Company presently has working interests in four producing wells in the Corsicana area in Texas.
The Hill #1 well was recently completed and the Company is awaiting final production testing which is currently underway.
KOKO are in negotiation for additional leases in the Corsicana area which may have potential chaulk formations. We have engaged legal counsel to examine the lease titles. The chaulk formations are very prolific and have been one of the largest production zones in this area over the past several years.
KOKO has a percentage interest for the title to the Pecan Gap to the base of the Woodbine structures on approximately 1000 acres. We have the potential to drill approximately 30 to 50 Pecan wells on this acreage.
In addition, we are in discussions with a major title holder to conduct a joint extensive seismic survey on this and other acreage to determine the existence of deeper structures for potential exploration.
Certain statements in this news release may contain forward-looking information within the meaning of Rule 175 under the Securities Act of 1933 and Rule 3b-6 under the Securities Exchange Act of 1934, and are subject to the safe harbor created by those rules. All statements, other than statements of fact, included in this release, including, without limitation, statements regarding potential future plans and objectives of the company, are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Technical complications which may arise could prevent the prompt implementation of any strategically significant plan(s) outlined above.
Ted Kozub, President and Chief Executive Officer
KOKO Petroleum Inc. (PINK SHEETS:KKPT)
KOKO Petroleum Inc.
Andrea Bleasdale
IR
Toll Free: 1-888-740-7276
ableasda@shaw.ca
www.kokooil.com
