UPDA Subsidiary - Texas Energy, Inc. - Enters Agreement to Purchase 2700 Acre Oil and Gas Field in Jack County, Texas; Acquisition Includes Existing Production and Undeveloped Barnett Shale Prospect
GRAHAM, Texas--(BUSINESS WIRE)--April 18, 2006--
Universal Property Development and Acquisition Corporation (OTCBB: UPDA) subsidiary, Texas Energy, Inc., has executed an agreement to purchase over 30 leases, covering approximately 2700 acres in Jack County, Texas. The property, known as the Catlin Oil and Gas Field, contains 64 wells, 12 miles of pipeline and a 70 mile gathering system. In addition, Texas Energy will acquire several pieces of much needed well service equipment including rigs, dozers and graders. This equipment has been internally valued in excess of $1,000,000.00.
"This acquisition establishes UPDA as a solid presence in North Texas and provides the service equipment we have been seeking so that we can perform our own workovers," said Chris McCauley, UPDA Vice President. In addition, the pipeline and gathering system will allow us to provide the neighboring producers with transportation services so that they can get their product to market. This acquisition has great promise."
In conjunction with this acquisition, UPDA will establish two additional subsidiaries - one to perform all drilling, workover and well maintenance services for UPDA properties in the area and another to market the pipeline and gathering capabilities to neighboring producers. These new subsidiaries will be funded by UPDA and utilize the equipment and pipelines acquired in this transaction.
"Despite the fact that these wells have been substantially ignored since Mr. Catlin passed away three years ago, they still generated in excess of $1,000,000.00 in revenue last year," continued UPDA's McCauley. "As soon as this deal is closed, we will commence a workover program that we expect will greatly enhance the production from the existing wells. After that, we will start a drilling program of relatively shallow wells similar to the 64 existing. At the same time, we will explore deeper drilling in order to exploit the Barnett Shale prospect of the property. If the property does produce from the Barnett Shale as we expect it will, Texas Energy will establish itself as force in North Texas oil and gas.""
An independent reserve analysis performed by Randy Moseley, Certified Petroleum Engineer, in November 2005, estimated that the property, from current production zones, contains reserves of approximately 2,500,000 mcfg and 400,000 barrels of oil. This analysis did not consider the production potential of the Barnett Shale prospect or other multiple pay zones of the property.
In addition to the lease rights, pipeline, gathering system and equipment, Texas Energy also acquired approximately 50 acres of surface rights, 35 of those acres attached to a house on the property and 15 acres involving the shop and equipment field. The total purchase price, including all brokers' commissions and due diligence consultants is $2,300,000.00 and the acquisition is scheduled to close on or before May 23, 2006.
The production from these wells will be reported by UPDA as it continues to update its website at: www.universalpropertydevelopment.com.
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