Crawford County - Kansas
Southeast Kansas Acquisition
Mass Petroleum Corp. ("Mass") is currently in the process of evaluating the acquisition of several leases in the Walnut, Southeast field in Crawford County Kansas. The target leases consist of six separate leases within the Walnut Southeast field area. In addition, Mass is also evaluating production assets in the McCune area. Each lease is developed with a number of producing wells and in some cases water injection as well. Production is primarily taken from the Bartlesville and Cattleman formations of Pennsylvanian age. Average well depth is approximately 400 feet. There are approximately 130 total wells on the property; leases are 100% working interest ("WI"), with net revenue interest ("NRI") at approximately 80%. Total acreage on all leases is over 1,300 acres.
History:
Due to the shallow nature of the reservoir and the lack of significant drive mechanisms, the wells typically produce at low rates with a small oil cut. Despite the low rates, the wells have been producing for decades and continue to produce from the tight sandstone reservoirs of the Bartlesville and Cattleman.
Walnut Southeast Production History Chart
| Year | Oil | Gas | ||||
| Production (bbls) |
Wells | Cumulative (bbls) |
Production (mcf) |
Wells | Cumulative (mcf) |
|
| 1990 | 6,133 | 59 | 511,820 | - | - | 0 |
| 1991 | 6,490 | 58 | 518,310 | - | - | 0 |
| 1992 | 6,619 | 60 | 524,929 | - | - | 0 |
| 1993 | 5,278 | 60 | 530,207 | - | - | 0 |
| 1994 | 5,478 | 56 | 535,685 | - | - | 0 |
| 1995 | 4,993 | 59 | 540,678 | - | - | 0 |
| 1996 | 5,368 | 141 | 546,046 | - | - | 0 |
| 1997 | 5,854 | 139 | 551,900 | - | - | 0 |
| 1998 | 5,093 | 142 | 556,993 | - | - | 0 |
| 1999 | 5,680 | 147 | 562,673 | - | - | 0 |
| 2000 | 5,608 | 147 | 568,281 | - | - | 0 |
| 2001 | 4,983 | 142 | 573,264 | - | - | 0 |
| 2002 | 5,934 | 146 | 579,198 | - | - | 0 |
| 2003 | 6,880 | 152 | 586,078 | - | - | 0 |
| 2004 | 7,716 | 153 | 593,794 | - | - | 0 |
| 2005 | 10,898 | 156 | 604,692 | - | - | 0 |
| 2006 | 13,202 | 167 | 617,894 | - | - | 0 |
| 2007 | 14,297 | 173 | 632,191 | - | - | 0 |
| 2008 | 14,586 | 193 | 646,777 | - | - | 0 |
| 2009 | 13,944 | 205 | 660,721 | - | - | 0 |
| 2010 | 3,374 | 127 | 664,095 | - | - | 0 |
*Source Kansas Geological Survey
McCune Production History Chart
| Year | Oil | Gas | ||||
| Production (bbls) |
Wells | Cumulative (bbls) |
Production (mcf) |
Wells | Cumulative (mcf) |
|
| 1990 | 4,637 | 36 | 475,346 | - | - | 25,376 |
| 1991 | 3,504 | 32 | 478,850 | - | - | 25,376 |
| 1992 | 2,756 | 33 | 481,606 | - | - | 25,376 |
| 1993 | 2,539 | 30 | 484,145 | - | - | 25,376 |
| 1994 | 1,863 | 25 | 486,008 | - | - | 25,376 |
| 1995 | 2,061 | 26 | 488,069 | - | - | 25,376 |
| 1996 | 3,071 | 30 | 491,140 | - | - | 25,376 |
| 1997 | 2,171 | 26 | 493,311 | - | - | 25,376 |
| 1998 | 1,668 | 21 | 494,979 | - | - | 25,376 |
| 1999 | 1,229 | 13 | 496,208 | - | - | 25,376 |
| 2000 | 1,655 | 19 | 497,863 | - | - | 25,376 |
| 2001 | 1,085 | 13 | 498,948 | - | - | 25,376 |
| 2002 | 937 | 13 | 499,885 | - | - | 25,376 |
| 2003 | 459 | 13 | 500,344 | - | - | 25,376 |
| 2004 | 241 | 13 | 500,585 | - | - | 25,376 |
| 2005 | 546 | 13 | 501,131 | - | - | 25,376 |
| 2006 | 863 | 13 | 501,994 | - | - | 25,376 |
| 2007 | 943 | 16 | 502,937 | - | - | 25,376 |
| 2008 | 1,761 | 36 | 504,698 | - | - | 25,376 |
| 2009 | 2,328 | 41 | 507,026 | - | - | 25,376 |
| 2010 | 403 | 30 | 507,429 | - | - | 25,376 |
*Source Kansas Geological Survey
Upside:
While production is relatively low for such a large land package, the upside is significant on two fronts. Firstly, the effectiveness of a proper water flood has been amply demonstrated by the few operators who are utilizing sound engineering practice to develop their fields. A five spot injection pattern has shown to be optimal in terms of extracting the maximum production from these reservoirs. Secondly, many of these older pools would benefit from simple and regular well bore clean out and regular maintenance on the wells themselves. Cleanout of accumulated sand has been very successful in bringing back shut-in wells to their former production rates. Cost to do these cleanouts is less than $1,000 per well. Surface equipment, in many instances has broken down. When oil prices are low, as they were in late 2008 and 2009, many wells are simply shut in and never returned to production. This project has a number of these wells, which would benefit from some minor refurbishment and return to producing status.
Production:
Typically, the area produces oil from shallow sandstones of Pennsylvanian age. The sands are relatively uniform over a wide area and are stratigraphically trapped is localized accumulations. The shallow nature of the reservoir and the low cost service availability allow wells to be drilled, completed and equipped for under $20,000 per well. Typically, at these shallow depths, wells are being drilled slim hole with 1" tubing and brass pumps utilized downhole and small surface jacks creating artificial lift. Typical pump jack cost is under $3,000. Wells certainly benefit from water flood and regular cleanout of the well bores due to sand sloughing.
Summary:
In summary, the land package encompasses several producing leases in southeastern Kansas. Production is currently believed to be approximately 12 BOPD and has the potential to move to around 20 BOPD with a modest level of field expenditure on both the McCune and Walnut South production areas. The large land position, light development of some of the leases, lack of a coherent water flood strategy and general lack of maintenance provides an opportunity to improve the leases and increase production and cash flow.
