EnerJex Resources Unveils Cherokee Oil Resource Play And Announces New Production Milestone
SAN ANTONIO, Sept. 13, 2012 /PRNewswire/ -- EnerJex Resources, Inc. (ENRJ) ("EnerJex" or the "Company"), a domestic onshore oil company, announced today that it has expanded its Rantoul Project, which will hereafter be referred to as its "Cherokee Project", by 6,700 acres. This represents an increase of 600% from 1,100 to 7,800 acres since the beginning of 2011, and the Company's working interest in the majority of this new acreage ranges from 55% to 80%.
Production from this project has reached a new milestone of approximately 250 barrels of oil per day (BOPD), representing a 150% increase since the beginning of 2012 and a 750% increase since the beginning of 2011. In addition, 26 new oil wells and 22 new secondary recovery water injection wells have been drilled in recent weeks that are in various stages of completion.
EnerJex's Cherokee Project targets oil at a depth of 650 to 750 feet from Middle Pennsylvanian (Desmoinesian) age sandstone and limestone formations within the Cherokee and Marmaton Groups. The prospective oil zones range in thickness from 5 to 25 feet and may be comingled and produced from the same wellbore. The Company has already identified hundreds of prospective drilling locations on its new acreage, which has the potential to yield more than 1,000 new drilling locations.
Initial production rates from recent wells on this expansion acreage have reached as high as 20 BOPD and have averaged approximately 5 to 10 BOPD per well, which is significantly higher as compared to EnerJex's original project acreage. The Company believes this improvement is a result of lighter gravity oil, multiple productive zones, greater depth, and virgin reservoir pressure. New wells in this area cost approximately $30,000 to drill and complete, and EnerJex intends to develop this project with vertical wells on 2.5 acre spacing, utilizing water injection to sustain oil production rates and offset natural reservoir pressure depletion. Management expects this project achieve an economic life of approximately 50 years.
EnerJex's CEO, Robert Watson, Jr., commented, "I am pleased to announce the expansion of our Cherokee Project, where we have identified a sweet spot with particularly favorable attributes that appear to be widespread over a significant portion of our acreage position. This provides an ideal setting for shallow oil development by enabling the Company to leverage its fixed costs over a confined area that is expected to be densely developed." Speaking further, Mr. Watson commented, "In addition to our Cherokee Project, EnerJex remains focused on developing its Mississippian Project in the near term, and the Company has been working on financing alternatives to aggressively develop this asset in an accretive manner for shareholders."
About EnerJex Resources, Inc.
EnerJex is a domestic onshore oil company with assets located in Eastern Kansas and South Texas. The Company's primary business is to acquire, develop, explore and produce oil properties onshore in the United States. Additional information is available on the Company's web site at www.enerjex.com.
This press release and the materials referenced herein include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements give EnerJex's current expectations or forecasts of future events. The statements in this press release regarding the acquisition of operating assets and related agreements; any implied or perceived benefits from any current or future transaction, and any other effects resulting from any of the above, are forward-looking statements. Such statements involve risks and uncertainties, including but not limited to: whether acquired properties will produce at levels consistent with management's expectations; market conditions; the ability of EnerJex to obtain financing for continued drilling; the costs of operations; delays, and any other difficulties related to producing oil; the ability of EnerJex to integrate the newly purchased assets and any newly acquired employees; the price of oil; EnerJex's ability to market and sell produced minerals; the risks and effects of legal and administrative proceedings and governmental regulation; future financial and operational results; competition; general economic conditions; and the ability to manage and continue growth. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. Important factors that could cause actual results to differ materially from the forward-looking statements are set forth in our Form 10-K filed with the United States Securities and Exchange Commission and our Form 10-Q. EnerJex undertakes no obligation to revise or update such statements to reflect current events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. EnerJex's production forecasts are dependent upon many assumptions, including estimates of production decline rates from existing wells and the outcome of future drilling activity. Although EnerJex believes the expectations and forecasts reflected in these and other forward-looking statements are reasonable, it can give no assurance they will prove to have been correct. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties.
EnerJex Resources, Inc.
Robert Watson, Jr., CEO
Phone: (210) 451-5545
Portage Equity Market Advisors, LLC
Jack Zedlitz, Managing Advisor
Phone: (405) 230-1182