G2 Energy Corp (CSE:GTOO, OTC:GTGEF) has unveiled a six-month plan developed by its president and chief operating offer to jumpstart its production over the next six months.
Over the half-year period, the company will be focused on increasing base production from its Masten unit (a 2,600-acre project located within the Levelland oil field in Texas), acquiring the Bridwell Oil Company’s Masten lease and optimizing production from current producers and idle wells on the Bridwell and Masten leases.
To achieve that, the company has planned a series of wellbore cleanouts and hot oil treatments designed to remove scale and paraffin. This work is underway and is expected to increase Masten Unit base production by 25%.
WATCH: G2 Energy Corp benefits from immediate cash flow as prepares to leverage its Masten Unit in Texas
Additionally, workovers designed to return four idle Masten unit wells to production will be undertaken in the near future, the company said. These programs include tubing repairs, lift optimization and the recompletion of several new productive oil and gas zones located higher up in the wellbore.
G2 Energy expects those steps to add 40-50 barrels of oil equivalent per day (boepd), which could be boosted further by an aggressive maintenance and production surveillance program.
Regarding the Bridwell acquisition, which the company expects to close shortly, the plan is to return several idle wells to full production and recomplete an upper gas zone that is currently unopen in all of the Bridwell wells.
All told, the company expects production to reach about 197 boepd after the six-month program is complete — more than triple its current production level. That would generate monthly revenue of around US$432,000 and an estimated six-month total revenue of about $2 million.
“This program is very achievable and all of our targets are based on actual performance of previous workovers and analog production from adjacent wells,” said David Whitby, chief operating officer. “Overall risk is very low, and return on investment will be high”
“The strategy that we have put in place is to acquire assets that have near-term optimization potential with production that can be increased at least 2-fold in the first six months in order to generate a balance between cashflow and growth for our shareholders,” Whitby added. “The six-month plan will deliver transformational results that can be duplicated on our next acquisition”
The total estimated cost of the well work will be around US$700,000 and the acquisition cost of the Bridwell including the closing costs will be US$230,000, the company said.
To finance the work and for general working capital, the company also announced a non-brokered convertible debenture private placement financing worth US$1 million.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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