Victory Energy Corporation announced today that it has received the first payment for revenue from natural gas sales from its wells in the Corporation's Canyon Sandstone Gas play located in the Texas Permian Basin.
Victory deposited its first revenue of approximately $63,500, pre-distribution, for natural gas sales of 11,960 MCF of natural gas production from its interest in six gas wells. The revenue was based on December 2007 natural gas pricing of $7.5825 per MCF. This revenue number will continue to grow each month as new wells are drilled, completed and brought online with their production.
As Victory's production has a 20% higher BTU content, the Corporation receives a 20% bonus in pricing. At the close business Friday, March 7, 2008 natural gas pricing was $9.77 per MCF, Victory's price with its 20% bonus is $11.724 per MCF. Each well will deliver approximately 500 Million Cubic Feet of proven undeveloped gas reserves per well to Victory.
Well 166-6 is flowing on its own at a steadily increasing production rate and continues to clean up the water from the stimulation treatment at a rate of approximately 30 bbls of frac water per day. The single point test is on hold until the production is dryer and the water does not interfere with the test results.
Well 166-8 should reach total depth of approximately 5000 feet by March 14. As the operator nears the target production zone, the drilling rate will slow down as the rig drills through the Canyon Sandstone formation.
The next drill site is already under construction and should be ready for the new drilling rig by March 17. By this date, all of the necessary auxiliary equipment for the new drilling rig will be ready for the rig to go into service and drill its first well.
"As new wells are drilled and completed, we anticipate increased interest by our investors into this gas field. With this, we intend to increase our activity in the Texas Permian Basin through purchase of additional equipment and the resources required to support them. These steps are strategic in the growth and long term development of shareholder value," stated Jon Fullenkamp, President of Victory Energy Corporation.
