(14th March, 2011)
TULSA, OK, Mar 14, 2011 (MARKETWIRE via COMTEX) — CAVU Resources, Inc. (”CAVU”), which trades as (pinksheets:CAVR), announced today the completion of its second phase of the Chisholm Lease rework.
Garvin County, OK - Chisholm Lease Project The Chisholm Lease Project is located in an area that stretches from Paul’s Valley to the Texas/Oklahoma state line and covers approximately 290 square miles. The area contains over 90 wells that were drilled between the late 1970’s and early 2000’s. Most of these wells are currently shut-in and can be secured, reworked and systematically put back into production starting with ones closest CAVU’s existing lease.
CAVU currently owns 190 acres with 9 existing wells, 4 of which were reworked in 2009, 2010 and 2011. By using this approach, CAVU could eventually work its way through the area consisting of more than 3,000 acres and 90 additional shut-in wells, of which 30 are known to be commercially viable wells that could be put back into production at an estimated cost of approximately $188,000 per well. CAVU has invested along with its partners approximately $1.8 million dollars in this existing project. Some of these wells also have other potentially productive intervals that could be perforated and co-produced utilizing horizontal drilling based on similar projects could possibly increase cumulative production to as much as 300 BOPD.
– Located about 1.5 hours south of Oklahoma City, OK
– In the historically prolific Washita River Valley
– Established oil and gas field
– Numerous historical wells completed in basal creek and oil creek zones
– 87%+ success rate when drilling for oil in these zones
– Nine wells on the lease have multiple production zones
– The Layton at 2800′
– The McKinney at 2950′
– The Burns at 3025′
– The Second Bromide at 3050′
– The Tulip Creek at 3100′
– The McLish at 3200′
– The Upper Oil Creek sand at 3680′
– The Arbuckle at 3900′
– Most wells on the lease have produced from the Burns, Second Bromide,
McLish and Oil Creek
– Estimated cumulative production for a well completed in the Basal Oil Creek sand is between 50,000 and 350,000 barrels of oil, with total recoverable in all zone estimated to be 350,000 to 500,000 barrels of oil
CAVU has replaced the gathering system, wells, tanks, and production equipment, with planned future leases and new wells to be consolidated at CAVU’s facilities. CAVU has already completed the rework of 3 production wells and the rework and increased volume permits on the current disposal well that can later be converted to a producing well. The 3 existing wells had recent servicing (cleaning out the well bores, acidizing the perforations and in some cases perforating new potentially productive reservoirs). It should be noted that of the 2 wells that have been in production since 2009, one well tested at about 35 BOPD and another at 10 BOPD with one well being acidized and new tubing valves and pumps. Currently the company is completing another producing well that has tested at 10 to 20 BOPD scheduled to be in production in the next two weeks.
While service work is being done on these wells and new wells are planned to be drilled, the CAVU land team plans to begin working with people in the area who have shut-in wells on their land. There are more than 50 of the known 90 viable wells that are contiguous to this acreage position and within immediate range of the CAVU gas gathering capabilities. Preliminary talks suggest that a majority of these shut-in wells can be acquired at a huge discount to their value so long as CAVU can get them into operation within a few months. If CAVU were to be successful in systematically working its way out towards wells beyond these initial 50 wells, there are also about another 200 other wells in the general area that are shut-in with most believed to be commercially viable.
CAVU believes that within 12 months of acquisition of 30-50 shut-in wells that the commercially viable wells can be turned on, which is estimated to result in additional production ranging anywhere between 300-700 BOPD in production. Management is utilizing conservative forecasts of 700 BOPD for production rates after drilling the new wells and putting these 30-50 wells into production.
The positive aspects for developing shallow gas and oil production in this area are:
– Location to strong and insulated gas markets with taps into major
pipelines, ample infrastructure and good availability of service
– Multiple pay zones at shallow depths with several zones that blanket
the area, making it feasible to complete a well nearly every time one
is drilled while keeping drilling risk low.
– Land is predominantly fee simple with pro-industry regulators who
CAVU plans to submit additional updates on production and its other producing and speculative leases as well as yearend financials and updated information statements by the end of March.
About CAVU Resources, Inc.
During World War II, Navy fighter pilots would look up at the sky and if it was a “CAVU” day then it meant ceiling and visibility unlimited. The pilots believed they would have unobstructed flying allowing them to see their targets quicker, identify the obstacles they needed to overcome, giving them a greater chance of success. The founders of CAVU Resources, Inc., chose the name CAVU because they believe that the company will be the embodiment of its name.
CAVU was formed with the goal of becoming a recognized regional player in the independent oil and natural gas industry by growing the company’s oil and natural gas reserves. CAVU is a natural resource company engaged in the acquisition, exploration and development of oil and natural gas properties. The Company operates in the upstream segment of the oil and gas industry with planned activities including the drilling, completion and operation of oil and gas wells in Oklahoma, Kansas, Colorado and Texas. The Company also owns two pipelines in its area of operations, which will be used for gathering its gas and oil and the gas and oil production of other producers. The Company has acquired leases and is currently exploring additional opportunities in oil, gas and helium leases. The company has acquired significant oil and gas equipment including rigs, trucks and completion equipment.
CAVU’s 100% owned subsidiaries, CAVU Energy Services, LLC provides contract drilling, fracture stimulation and directional drilling services to oil, natural gas exploration and production companies. EnviroTek Fuel Systems, Inc., provides natural gas delivery and marketing thru its own pipelines, FILO quip Resources, LLC a licensed Oil and Gas Operating Company manages the company’s properties and leases in Oklahoma, Colorado and Montana. CAVU plans to expand operations not only in the traditional Oil and Gas business, but also to invest in Geo-Thermal, Wind, taking advantage of the changing environment and in the world’s need for new, green and innovative resources. More information is available at the company’s website at http://www.cavu-resources.com.
Cautionary note: This report contains forward-looking statements, particularly those regarding cash flow, capital expenditures and investment plans. Resource estimates, unless specifically noted, are considered speculative. By their nature, forward-looking statements involve risk and uncertainties because they relate to events and depend on factors that will or may occur in the future. Actual results may vary depending upon exploration activities, industry production, commodity demand and pricing, currency exchange rates, and, but not limited to, general economic factors. Cautionary Note to U.S. investors: The U.S. Securities and Exchange Commission specifically prohibits the use of certain terms, such as “reserves” unless such figures are based upon actual production or formation tests and can be shown to be economically and legally producible under existing economic and operating conditions.
CAVU Resources, Inc.
5147 South Harvard Ave,
Tulsa, OK 74135
SOURCE: CAVU Resources, Inc.