We are re-opening around 260 oil wells in 2012. The wells last pumped oil in 1988 when the price was $11 per bbl, now it's $111. The production rate was >2 bbls per day. All the pumping equipment is still on the rigs but there is need of some repairs. We also have gas right on the land.
At this stage we have secured the rights to 24 leases x 12 wells per lease, however there are many more.
We have started a 60 day due diligence process and minor repairs on the equipment.
The team on the ground are drilling experts and the team in the office in Alabama are ex oil well owners.
We will open the first wells during March 2012 at a rate of 10 per month.
We have agreed a purchase price of $1,500,00 for the 24 leases. As lease titles are legally cleared and transferred to us we pay $66,000 each time. The $1,500,000 is held in Escrow and as each lease clears we pay the $66k to owner.
Oil price is $111 per bbl today. We are pumping East Texas Sweet Crude, a very nice easy to refine Crude. We have 3 Crude Oil buyers in the state of Kentucky ready to buy from our storage tanks on site.
I'm looking for investment blocks of $300,000 x 10 = $3,000,000.
We need to sell 5 blocks to put the $1,500,000 into escrow and a futher $1,500,000 for operations and equipment.
We would like to take debt rather than equity but will do both.
For each $300,000 invested we will start repayment of $30,000 per month after month 6 of operations. The payback period will be 13 months, so there will be a return of $390,000.
Our 3 year aim is to float the company in US & China maybe (Dual listing) and to buy more leases and also start gas extraxtion form the land.
Our main competitive advantage are the natural resources on our land, According to estimations from local authorities there are 1 billion bbls still underground on our land. At the same time there will always be a demand for crude.
We can also secure an excellent return of money on the land.
• Purchase of Wells
• Site operational equipment
• Staff wages, etc.
In 45 days we need £1,500,00 in an escrow acc and $300,000 to start operations.