EnerJex Resources, Inc. (OTCMarkets: ENRJ) ("EnerJex" or the "Company") announced today an update on its operating activities in Morgan County, Colorado, where the Company owns a 100% working interest in approximately 19,000 acres covering the vast majority of Adena Field.
EnerJex has successfully initiated oil production from the three previously announced wells, including two wells that were reactivated in the J-Sand formation and one well that was recompleted in the D-Sand formation at depths of approximately 5,500 feet. Initial results from these wells have met or exceeded management's expectations and the Company plans to announce production rates once they have stabilized.
Following these positive initial results, EnerJex added a second rig to accelerate development of the project and is currently in the process of reactivating one additional J-Sand well and recompleting one additional D-Sand well. The additional J-Sand well has already been re-entered and tested, and it is currently being tied into production. This well produced a higher than expected oil cut and encountered a stong show of natural gas during the testing operations.
The additional D-Sand well is expected to be the first of multiple wells to begin producing oil from a secondary recovery waterflood project that produced nearly 500,000 barrels of oil during the primary recovery phase. EnerJex began injecting water into this formation during early 2013 and expects to establish a significant amount of stabilized oil production from this project as the reservoir pressure increases and additional wells are completed.
The Company plans to keep two rigs running at Adena Field for the foreseeable future. Due to the relatively low cost of re-entry opportunities at Adena, which are estimated to cost approximately $200,000 each, EnerJex expects to have ample liquidity to also execute an aggressive drilling program in Kansas during 2014. Further details on the Company's drilling plans for 2014 will be forthcoming.
According to the Colorado Oil and Gas Conservation Commission, Adena is the third largest oil field in the history of Colorado behind Rangely and Wattenberg, having produced 75 million barrels of oil and 125 billion cubic feet of natural gas. Nearly all of the producing wells in Adena Field were temporarily abandoned or shut-in during the secondary recovery phase in the mid-1980s when oil prices collapsed, and only a small number of wells have been produced since that time. Approximately 130 wells are currently shut-in or temporarily abandoned, of which the Company has initially identified approximately 75 wells to be reactivated in the J-Sand formation or recompleted in the D-Sand formation.
Management Comments
EnerJex's CEO, Robert Watson, Jr., commented, "I am pleased with our initial results at Adena Field and I look forward to providing additional updates on this project and our Kansas operations in the near future. I believe that 2014 will be a breakout year for the Company."
About EnerJex Resources, Inc.
EnerJex Resources, Inc. is an independent exploration and production company focused on the acquisition and development of oil and natural gas properties located in the mid-continent region of the United States. The Company owns oil and gas leases covering approximately 100,000 acres in multiple prolific hydrocarbon basins located in four states including Colorado, Kansas, Nebraska, and Texas.
