ALPHA ENERGY, INC. entered into a Purchase and Sale Agreement with Chicorica, LLC. The Agreement is to acquire oil and gas assets in New Mexico in the Rayado Project.
By GlobeNewswire, February 21, 2019, 07:00:00 AM EDT
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.
This press release contains forward-looking statements regarding Alpha Energy that are intended to be covered by the safe harbor “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995, based on Alpha’s current expectations and includes statements regarding acquisitions and divestitures, estimates of future production, future results of operations, quality and nature of the asset base, the assumptions upon which estimates are based and other expectations, beliefs, plans, objectives, assumptions, strategies or statements about future events or performance (often, but not always, using words such as “expects”, “projects”, “anticipates”, “plans”, “estimates”, “potential”, “possible”, “probable”, or “intends”, or stating that certain actions, events or results “may”, “will”, “should”, or “could” be taken, occur or be achieved). Statements concerning oil and gas reserves also may be deemed to be forward looking statements in that they reflect estimates based on certain assumptions that the resources involved can be economically exploited. Forward-looking statements are based on current expectations, estimates and projections that involve a number of risks and uncertainties, which could cause actual results to differ materially from those, reflected in the statements. These risks include, but are not limited to: the risks of the oil and gas industry (for example, operational risks in exploring for, developing and producing crude oil and natural gas; risks and uncertainties involving geology of oil and gas deposits; the uncertainty of reserve estimates; the uncertainty of estimates and projections relating to future production, costs and expenses; potential delays or changes in plans with respect to exploration or development projects or capital expenditures; uncertainties as to the availability and cost of financing; fluctuations in oil and gas prices; risks associated with derivative positions; inability to realize expected value from acquisitions, inability of our management team to execute its plans to meet its goals, shortages of drilling equipment, oil field personnel and services, unavailability of gathering systems, pipelines and processing facilities and the possibility that government policies may change or governmental approvals may be delayed or withheld. Additional information on these and other factors which could affect Alpha’s operations or financial results are included in Alpha’s other reports on file with the Securities and Exchange Commission. Investors are cautioned that any forward-looking statements are not guarantees of future performance and actual results or developments may differ materially from the projections in the forward-looking statements. Forward-looking statements are based on the estimates and opinions of management at the time the statements are made. Alpha does not assume any obligation to update forward-looking statements should circumstances or management’s estimates or opinions change. Initial production rates are subject to decline over time and should not be regarded as reflective of sustained production levels.
For more information contact John Lepin at [email protected].