|By Marketwired .||
|June 24, 2014 05:45 AM EDT||
DUBLIN, OH -- (Marketwired) -- 06/24/14 -- Cardinal Energy Group, Inc. (OTCQB: CEGX) announces the acquisition of the Bradford Leases in Shakelford County, Texas from Bluff Creek Petroleum, LLC. We have acquired a 93.75% working interest (70.3125% net revenue interest) in 2-acre producing units surrounding each of seven existing wells located on the Bradford "A" and Bradford "B" leases. We purchased these leasehold interests pursuant to the terms of Purchase & Sale and Farmout agreements for a total cash consideration of $225,000.
Under the terms of the Farmout Agreement our wholly-owned subsidiary CEGX of Texas, LLC is obligated to spud the initial "Earning Well" by September 15, 2014. The initial well is part of a "continuous drilling program" which will afford Cardinal the opportunity to earn additional 2-acre producing units on the Bradford leases which comprise a total surface area of 320 acres. The current existing 7 production wells are drilled into the prolific Tannehill formation. There are also multiple new well locations already mapped for the drilling of injection and production wells. In addition to the Tannehill sands the lease offers additional multiple pay zones behind pipe. The property, which heretofore has never been waterflooded has one tank battery and is currently producing 1.34 BOPD.
According to a 1956 Geological report on the AAPG Datapages web site by James E. Russell regarding the Tannehill Petroleum Company Newell Waterflood Project Shackelford County, Texas, the Abstract states:
"Waterflooding the Tannehill sandstone underlying the Newell Lease in Shackelford County, Texas, can be considered a success. Pilot operations were commenced in May, 1952 by the Tannehill Petroleum Company. Performance of the Pilot Flood was encouraging and a decision to proceed with full-scale development was made early in 1954. By the end of 1956 the project had been extended to cover 393 acres and presently includes productive acreage on the Newell, Moberly and Jeter Leases. Production was increased as a result of water injection from 20 barrels per day to a peak rate of 498 barrels per day or 25 times the rate under primary operations.
"Oil recovery as a result of water injection has amounted to 286, 446 barrels as of December 31, 1956. Engineering estimates indicate a recovery of approximately 800,000 barrels as a direct result of water flooding the area presently developed. This recovery is in addition to that obtained through primary production methods. (See http://goo.gl/0gTfwR)."
CEO Timothy Crawford remarks, "We are really excited about our new Bradford prospect. It is adjacent to our Powers Sanders lease in Shakelford County Texas, which will make it very convenient and cost-effective for us to operate. The Tannehill formation is a historically prolific pay zone. Initially we will be using a pressure maintenance system until we can permit and drill strategically located injection wells so we can establish a true water drive. Other Tannehill plays have produced very strong wells with a water drive. Some fields have come in over 400 BOPD when a water drive was employed. We hope for similar results with our Bradford leases when it is fully established over the next 6 months. Plus, if we are successful with our waterflood operation at Bradford we will be in an excellent position to apply this operating strategy to our operations on the neighboring Powers Sanders property."
Forward Looking Statements
In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Cardinal Energy Group, Inc., is hereby providing cautionary statements identifying important factors that could cause our actual results to differ materially from those projected in forward-looking statements (as defined in such act). Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, indicated through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "estimated," "intends," "plans," "believes" and "projects") may be forward-looking and may involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. These statements include, but are not limited to, our expectations concerning our ability to obtain financing and close on the acquisition of the oil and gas leases and property, our beliefs concerning our ability to increase the rate of oil and gas production, and the expected demand, pricing and operating results for our oil and gas operations.
About Cardinal Energy Group, Inc.
Cardinal Energy Group, Inc. is a U.S producer of oil and natural gas within the United States. The Company is based in Dublin, Ohio. Cardinal focuses on known formations that have significant proven reserves remaining that can be produced economically. Cardinal targets fields with wells that may need remediation due to neglect or undercapitalization. We select prospects that offer a strong up-side for production. The upside we seek in a prospect is twofold -- it must have the potential to be restarted or have its current production increased using newer technology and remediation methods and; it must also have additional lease acreage which can be further developed by completing development wells adjacent to existing producing wells. Cardinal exploits these undervalued assets by acquiring a majority working interest in the prospect and then applies the Company's calculated development plan. Cardinal also seeks acquisitions of over-leveraged companies when there is a clear upside from their purchase based on strong commodity prices. The Company operates throughout the Continental United States. More information on Cardinal Energy Group, Inc. is available at www.cegx.us.