EnerJex Resources, Inc. (OTCMarkets: ENRJ) ("EnerJex" or the "Company") announced today that it has doubled its acreage position in the Company's Mississippian Oil Project from 2,840 gross (2,556 net) acres to 6,370 gross (5,267 net) acres.
The expansion acreage is located in Woodson County, Kansas, in close proximity to EnerJex's existing operations. Included is a 90% working interest in 1,200 acres located directly adjacent to acreage that the Company successfully developed in 2013, which is in the early stage of secondary recovery. EnerJex expects to drill approximately 100 oil wells on this new acreage, and management expects this expansion to contribute new proved reserves to the Company's year-end reserve report. EnerJex earned this acreage after achieving certain development milestones related to the adjacent acreage, and it expects to earn another 320 acres in this area after achieving additional development milestones.
Also included in the expansion is a 70% working interest in 2,330 acres located approximately five miles away from the Company's producing properties. This acreage is exploratory and has higher potential for oil production and reserves due to higher anticipated reservoir pressure. EnerJex has already participated in drilling two new wells on this acreage during the past month, both of which appear to be successful and are in the process of being completed. This acreage is located in an area that has been sparsely developed although multiple prolific wells were drilled nearby in the 1950's.
EnerJex's Mississippian Project produces approximately 200 barrels of oil per day from vertical wells completed in the Mississippian formation at a depth of approximately 1,700 feet. In addition to drilling dozens of new oil wells in this project, the Company has drilled more than 40 secondary recovery water injection wells that are expected to increase reservoir pressure and oil production throughout 2014. This project is characterized by low production decline rates and has an estimated economic life of 50 years.
