Alpha’s business model is focused on acquisition of existing production, utilizing enhanced recovery methods with new technology and development drilling to increase production and add value to the properties we acquire.
We have identified several oil well recompletions, reworks, and drilling prospects in the Cherokee Platform region of Central Oklahoma, as well as the potential for development of the Woodford and many formations of the stacked Chimneyhill Subgroup. Many of the existing wells in this project have several opportunities for recompletion behind pipe, which keeps risk lower and profitability higher due to multiple opportunities for success within each wellbore. Targeting current production in the conventional formations will lend the opportunity to exploit offset acreage. The area of interest also has potential for the exploration of unconventional drilling which can increase reserves. Expected expenses are reasonably low for the opportunities present in these regions.
Assets under agreement at this time in the Cherokee Platform region of Central Oklahoma are located in Lincoln and Logan counties. This project contains 59 wells and 9 disposal wells and approximately 8000 acres. We are continually looking to expand our asset base located in the Chimneyhill Subgroup of the prolific Cherokee Platform that provides multiple formation drilling opportunities which include horizontal pad drilling in the multiple, oil-rich Woodford, Mississippi, and Hunton formations with thick pay zones at vertical depths up to 8,500 feet.
Alpha will maintain a drilling program targeting shallower formations which provides a mix of opportunities and limited risk factors.
These shallower wells are drilled from depths ranging from only 1,500 feet for some shallower Chimneyhill Subgroup oil and gas wells to deeper wells drilled in the Mississippi, Woodford, Hunton, Viola, and prolific Wilcox formations which range in depth to 7,000 feet. Our focus on these shallower prospects will minimize Alpha’s initial risk exposure on drilling and operating costs.
Total expected daily rates on new drill well locations are expected to be in the range of 300-400 barrels of oil/day per well and individually should provide a payout in less than one year. Associated total reserve size is expected to be between 400 and 500 thousand recoverable barrels per well. Aggregated rates of return are anticipated to be approximately 60% at pricing of $55/barrel.
Additional drill sites have been identified that are estimated to contain 1.9 million barrels of incremental Probable (or 2P) reserves and 1.3 million barrels of incremental Possible (or 3P) reserves. These locations are spread across 2 counties in areas adjacent to and surrounding existing production.
As we grow, we plan to expand further into the Cherokee Platform opportunities in the Central Oklahoma Region. Wells in these areas range from 3,500 feet to 10,000 feet and are more expensive to drill and operate, but also provide a larger return. Most of these wells are located in the Chimneyhill Subgroup on the Cherokee Platform.
Our future also includes expansion into other regions of Oklahoma and New Mexico and the Panhandle of Texas. We will place a great deal of emphasis on oil and natural gas production, as well as the transportation of natural gas. We believe natural gas will continue to fuel the future due to the clean-air standards regulations and we will continue to include natural gas projects within our target operations.