DENVER, CO–(Marketwired – November 10, 2016) – Foothills Exploration, Inc. (OTCQB: FTXP) (the “Company” or “FTXP”), an independent oil and gas exploration company engaged in the acquisition and development of oil and gas properties in the Rockies, and Gulf Coast, is pleased to announce that it has entered into a farm-out agreement with Koch Exploration Company, LLC (“Koch”), a subsidiary of Koch Industries, Inc., in relation to the Ironwood and Paw Paw Prospects located in the Big Horn Basin of Wyoming.
“We’re pleased to have reached an agreement with Koch Exploration Company, LLC. This adds to our existing developmental acreage inventory in Wyoming, bringing the total up to over 50,000 acres,” commented B.P. Allaire, Chief Executive Officer. “The Company has already completed detailed work on the Paw Paw prospect, including geological analysis, 3-D seismic interpretation and we are now in midst of preparations to commence drilling operations. Key to this agreement will be the ability for the Company to drill our first well before the end of 2016,” added Allaire.
The Ironwood and Paw Paw prospects cover about 10,583 acres with total possible recoverable reserves from the two prospects amounting to approximately 7 million barrels of oil. The farm-out agreement provides the Company with access to an immediate drilling prospect, defined by 3-D seismic with short and long-term production potential. The team at FTXP believes that the Paw Paw and Ironwood prospects considerably increase the Company’s potential scope of operations in the Rockies.
The Ironwood Prospect is a 6,115 acre updip field extension play. The adjacent Cotton Creek Field produced approximately 67 million barrels of oil (“MMBO”) and 68 billion cubic feet of gas (“BCFG”) primarily from the Phosphoria formation. Koch’s evaluations and the Company’s preliminary analyses both indicate that the play has a potential estimated ultimate recovery (“EUR”) of 5MMBO. The Ironwood prospect has both vertical and horizontal development opportunities, with a potential of 9 vertical wells using 80-acre spacing or 12 horizontal wells on 320-acre spacing. The Company anticipates drilling its first well on this prospect during the first half of 2017.
Paw Paw Prospect
The Paw Paw prospect covers 4,467 acres and is a direct analog to the highly productive Enigma Field (EUR 3.788 million barrels of oil, Tensleep Formation) located only two miles away. The Tensleep Formation has a history of prolific production and there are two nearby analogues. The Paw Paw prospect has a potential primary and secondary recovery of up to 2 million barrels of oil. The Company plans to complete drilling a test well on the Paw Paw prospect targeting the Tensleep Formation before the end of 2016
“We think this is an attractive opportunity for the Company to increase its acreage position in the Rockies while applying our internal expertise in interpreting 2-D and 3-D seismic data to develop two prospects with significant long-term revenue potential” said Mr. Allaire. FTXP intends to drill a conventional 4,500 foot well on the Paw Paw prospect to test the Tensleep Formation before December 13, 2016. “As part of the agreement between us,” noted Mr. Allaire, “Koch will build the drill site location and conduct temporary operations for the benefit of FTXP to the point of conductor pipe.” FTXP will reimburse Koch for all costs that it incurs on the Company’s behalf and FTXP will assume well operations once all rights and permits have been transferred. FTXP will earn a 100% working interest on the initial Paw Paw well until payout. After payout Koch will back in for a 25% working interest on the initial well and any subsequent wells drilled on the prospect. For any subsequent wells drilled on the Paw Paw prospect, Koch has agreed to pay its proportionate 25% share of the drilling and completion costs with FTXP paying the remaining share.
In order to earn a 75% working interest in the Ironwood prospect, the Company has agreed to pay 100% of the costs to drill and complete (to the tanks) a test well to the Phosphoria Formation on or before July 1, 2017. Koch agreed to pay its proportionate 25% interest on any additional wells drilled on the Ironwood prospect after the initial test well.
About the Company
FTXP, through its wholly owned subsidiary Foothills Petroleum, Inc., a Nevada corporation (“Foothills”), is an early stage, independent oil and gas exploration and development company engaged in the acquisition and development of oil and gas properties in the Rockies and Gulf Coast. Foothills intends to acquire dislocated and underdeveloped oil and gas assets and seeks to maximize those assets to create shareholder value. Foothills maintains its principal executive office in Denver, Colorado.