U.S. Energy Enters Into Additional Oil and Gas Participation Agreement With Houston Energy L.P.admin
U.S. Energy Corp., a natural resources exploration and development company with interests in molybdenum, oil and gas, geothermal, and real estate assets, today announced that it has entered into an additional Participation Agreement with Houston, Texas-based Houston Energy L.P. (HE) to acquire a 11.11% working interest in an oil and gas prospect located in Southeast Texas. HE, a privately held independent oil and gas company exploring the Offshore Gulf of Mexico, South Louisiana, Texas Gulf Coast, West Texas, and Southeastern New Mexico will be the operator of the contract area.
Under the terms of the agreement, U.S. Energy has paid sunk land costs and a prospect fee of approximately $12,900 and will be responsible for 11.11% of the costs to drill an initial test well (ITW) to earn an 8.33% after casing point (ACP) working interest (6.1% net revenue interest). The initial commitment under the agreement is approximately $96,000 to the casing point. Spudding of the well is expected to take place in June 2009 with an initial planned drilling depth of approximately 8,000 feet. HE believes this well has a resource potential of 4 BCF and 280 MBO.
“We are pleased to announce another important step forward in our oil and gas initiatives. The first well with Houston Energy should reach total depth within the coming weeks, and we anticipate the initial well under this participation agreement to be spud in early June,” stated Keith G. Larsen, CEO of U.S. Energy Corp.