With oil prices still in a gully, it’s likely a good time for oil companies of all sizes to be announcing new finds and maneuvering themselves into a position of ownership, so as to enjoy the fruits of their labors.
In mid-May, Houston-based Savoy Energy Corporation (OTCBB:SNVP) came out with the news that it has entered into a lease for a 144-acre property in nearby Gonzales County. The leased property includes proven non-producing reserves in the Austin Chalk formation. The Company believes that there may be production potential in the Eagle Ford Shale, which is a part of the leased property.
What’s notable about the leased property is that it contains one non-operating well with an estimated production output of 20 to 25 barrels of oil per day. SNVP believes that re-entry of that well could be completed in six months or less. Under the terms of the lease agreement -- the first of what the company hopes will be several potentially lucrative ones -- SNVP has a 75% working interest of any production realized from Austin Chalk.
Company CEO Arthur Bertagnolli expressed the view that, though Eagle Ford is the "driving play" in SNVP’s future development, anything coming out of Austin Chalk would be gravy.
SNVP is an independent oil and gas company building a diversified portfolio of valuable oil and gas assets in the United States. The company is focused on identifying abandoned oil and gas assets, which are then brought online through recompletion and workover activities, a meticulous process of evaluation, application of modern well technology, and stringent management controls.
This process allows the company to increase its asset base and cash flow, while significantly reducing the cost of initial drilling, and takes away the risk of traditional exploration projects.
Four other projects -- also in Gonzales County -- on which SNVP is working include the Ali-O No. and Rozella Kifer, as well as the Zavadil No.1 and Wright properties; all purchased and development within a few months of each other in 2006 and 2007. With the leases, SNVP acquired ownership of all machinery, fixtures, equipment, tanks, well bore, casing and all other equipment used in connection with the operation of, and production of, an oil well located on the leased premises.
Perhaps as a reflection of the fluctuation in oil prices -- dips that are not always kind to oil operators -- SNVP finds itself in the basement of a 52-week trading range at just under three cents. It fell to two cents just a week and a half ago, after soaring as high as 53 cents last July.
Perhaps with petroleum prices as shaky as they are, it’s a good time for companies like Savoy to marshal its forces and get on with the job of producing fuels for when the economy -- and the fortunes of its industry -- truly improve.
Related Stories
