Avalon increases ownership in the East Chandler Field
  by: OilOnline
  Thursday, July 03, 2008

Avalon Oil & Gas, Inc. has signed a letter agreement to acquire all of the oil and gas producing assets owned by Bedford Energy, Inc. in the East Chandler Field, Lincoln County, Oklahoma. Avalon will increase its current interest in the Grace #2 well and acquire working interests in four other producing wells in the East Chandler Field, the Grace #1, Grace #3, Grace #5A and Grace #6 wells. Avalon initially acquired a working interest in the Grace #2 well in June, 2008.

Avalon is increasing its working interest in the Grace #2 from 2.5% to 7.5%; and increasing its net revenue interest in the Grace #2 to 11.95%. Avalon is also acquiring interests in four additional wells in the East Chandler Field. The company is acquiring a 10% working interest and 13.825% net revenue interest in the Grace #1, Grace #3, Grace #5A and Grace #6 wells. Avalon is also acquiring a salt water disposal well and offset and development acreage in the two quarter sections of the East Chandler Field.

The Grace #2 was completed in the Viola Limestone, and is currently producing 350 MCF of gas per day. The Grace #5A was completed in the Prue Sand with an initial potential of 50 BOPD and 300 MCFPD. The Grace #5, the Grace #1, the Grace #3 and the Grace #6 wells will be completed in the Hunton Lime.

In this transaction, Avalon will acquire total reserves of 90,000 barrels of oil and 559 MMCF of gas.

The Hunton Lime Reserves from the Grace #1, the Grace #3 and the Grace #6 wells are estimated to be 48,000 barrels of oil and 423 MMCF gas. The Upper Red Fork Sand reserves for the Grace #5A are estimated to be 30 MMCF of gas.

Avalon will also be acquiring Prue Sand potential in the Grace #3, Grace #5A and the Grace #6 wells. Estimated Prue Sand reserves for these three wells are 33,000 barrels of oil and 81 MMCF of gas.

Click here for more of Today's News Headlines