250,761 BOE in first quarter/Closing of asset sale expected on or before 30 May
Heidelberg/Denver. Tekton Energy reported today that the company produced 250,761 barrels of oil equivalent in the first quarter of 2014. Tekton’s share of the production after deduction of working interest and royalty interests was 130,369 barrels of oil equivalent.
Due to completion of several direct offset wells during the first quarter, Tekton’s Rancho and Pavistma wells were shut-in for safety purposes and did not produce steadily. The vertical wells were shut-in for most of the quarter for the same reason.
Furthermore, the company has received an updated Reserve Report by Ryder Scott, one of the leading petroleum consulting firms in the U.S. The report states that Tekton’s total proven reserves have increased from 2 million BOE in June 2013 to 7.36 million BOE as of 31 January 2014.
The report only includes data through 31 January 2014 and therefore the data from wells drilled or connected thereafter has not yet been accounted for. Those five new wells that were drilled from the Pavistma and Frye Farms pads started production on 7 March. They produced 3,312 gross BOE per day in the first 30 days of production, Tekton’s average working interest in these wells is 96%. Amongst these five wells, two wells with extended laterals produced 809 gross BOE per well alone.
Tekton is now producing from 12 horizontal and 9 vertical wells. Currently, 12 more horizontal wells are being drilled or completed. Drilling has continued with one rig since mid-March. Tekton and the buyer of Tekton’s assets have agreed that they prefer to slow down the drilling sequence until the transaction will be closed.
As far as the asset sale is concerned, Tekton was informed by the buyer that all mineral leases were accepted and all environmental reviews were completed therefore the USD 18 million down payment was released from escrow to Tekton. Tekton still expects the closing of the sales transaction on or before 30 May 2014.
Heidelberg, 30 April 2014