Investors are bidding up shares of Elite Group, Inc. (OTCPK:ELTZ) as the company signed purchase agreements for two properties in Texas. The first purchase agreement was to acquire a 75% working interest in a previously announced two well package in the Permian Basin of Texas. The company has arranged for $200,000 in debt financing for this acquisition, without increasing the number of outstanding shares.
Initial production from these wells is estimated at 20 barrels per day plus 350 – 400 MCFD, indicating a payout of approximately 12 months. The wells are both in the San Andres formation, at around 4,500 feet in depth. This formation is a multi-billion-barrel field in the Permian Basin.
The second purchase agreement is for Bullseye Yard Services, LLC. The company will hold a 100% ownership of the company. Bullseye is an existing tank wash facility and oilfield equipment cleaning company located in Big Lake Texas.
Elite has arranged for $350,000 in debt only financing for this purchase, again without increasing outstanding shares.
The Permian Basin, located in Western Texas and Southeastern New Mexico covers an area approximately 250 miles (400 kilometres) wide and 300 miles (500 kms) long. It was first discovered in 1925 and to date has produced over 29 billion barrels of oil and 75 trillion cubic feet of natural gas.
As mentioned off the top, the purchase agreements seem to resonate with shareholders of ELTZ as shares have rallied 22.5% on the news with the stock closing at $0.049.
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