HOUSTON, Feb. 21, 2019 (GLOBE NEWSWIRE) — Alpha Energy, Inc. (OTC.PK – APHE) (“Alpha”) announced today a definitive Purchase and Sale Agreement with Chicorica, LLC, to acquire oil and gas assets in New Mexico in the Rayado Project.
The Rayado Project is a conventional exploration prospect in New Mexico targeting a seismically-defined structure. In addition to the main prospect there are three other prospects. Alpha will begin leasing activities and gain a position on some or all of the prospects. Additional 2D seismic is available on some of the prospects; data will need to be acquired on others. After obtaining leasing and scientific information, we will select the top two prospects for drilling. Drill depths are anticipated to be 7,500 feet; horizontal technology is not required and reservoir stimulation may be minimal. The analog is the prolific Paint Ridge Field in the Texas Panhandle, where several wells reported initial production rates from between 1,000 and 2,000 barrels of oil per day from vertical wells in the Granite Wash Formation.
Our current development plan is to drill and complete the wells in sequence. We currently estimate that we will begin drilling upon completion of additional geophysics and a geological report by an independent well site geologist. The four prospect areas of the Rayado Project total 15,260 acres with a potential recovery of 20 to 50 million barrels of oil.
We currently forecast a total capital budget for 2019-2020 of approximately $7,440,000, including drill and complete first well $2,250,000 and drill and complete second well $2,250,000 in Rayado. To the extent that well performance exceeds our expectations, or commodity prices increase significantly, however, we possess the financial flexibility to expand our program during the year.
John Lepin, the Company’s Chairman and Chief Financial Officer said, “We were truly fortunate to have been able to acquire such a high-quality project in New Mexico this year, and at a very attractive entry price; and we are extremely excited about the commencement of the development of the Rayado Project. While our initial focus will be on the acquisition of producing well bores, with ‘stacked’ behind pipe zones in the Cherokee Platform in central Oklahoma, we believe that the Rayado Project provides significant long-term reserve growth. The Cherokee Platform is one of the few domestic plays that provide return-justified drilling opportunities in the current price environment. We believe that our current acreage position in Logan County has the potential to be very impactful for our shareholders.”
Alpha Energy, Inc. is a Houston, Texas based, independent energy company engaged in the acquisition, exploration, development and production of crude oil and natural gas. Additional information is available on the Company’s website at www.alphaenergyinc.us.