America Resources Exploration Inc (OTCBB:AREN) reported that it bought a fractional stake in the Winchester #1H gas and oil well based in Madison County. The well is run by Woodbine Acquisition, LLC of Texas and spreads on a 431 acres lease.
America Resources reported that the current production is done from the Woodbine formation from a depth range of 9,240 to 14,835 feet. The daily average production rate is nine MCF of gas and 54 barrels of oil for the period completed in April. This well was initially completed in 1Q2012. The details are available in the 8-K filing submitted with the SEC. Huang Yu, the CEO stated Woodbine Acquisition has been managing this well with steady production. Although it is a smaller incremental production asset for the company, the acquisition prospect will be accretive and offer a steady future revenue stream.
In unrelated news, America Resources reported that it has obtained its petroleum engineer’s reserve projections for its newly bought Emery County, Utah leases. The objective of this report is to assess the recently bought assets in Emery County, Utah. These properties comprise nearly 2,800 total acres, and the closest producing assets are Salt Wash Field based nearly 18 miles east and the Big Flat Field almost 24 miles southeast. The interest acreage would be measured reasonably wildcat in nature.
America Resources stated that when there is no close offset production to utilize in measuring reserves the two most prevalent used methods are analogy to closest field and second volumetric assessment for Original-Oil-In-Place and recovery factor.
In last trading session, the stock price of America Resources Exploration Inc (OTCBB:AREN) declined more than 21% to close the trading session at $0.560. The decline came at a share volume of 2.28 million compared to average monthly share volume of 1.91 million. The market cap stands at $91.87 million.