Deal with China provides funds for Texas firm to drill at Kansas sites
12/16/2013 9:31 AM
12/16/2013 6:37 PM
Houston-based Petro River Oil said Monday that it plans to start drilling in Harvey and Butler counties now that it has closed a deal for $6.5 million from China-based Petrol Lakes Holding Limited.
The deal closed on Friday at $0.08 per share for Petro River Oil stock. Petrol Lakes Holding Limited is a newly formed investment group with strategic ties to China’s oil and gas industry, according to Petro River.
In Kansas, Petro River has 85,000 acres in south-central and central Kansas, running from Cowley County to McPherson and Marion counties.
Exploration will focus on the Mississippian lime formation around the Nemaha Ridge area. The company hasn’t actually drilled yet, said executive vice president Daniel Smith, but it expects to start a program of vertical wells. Petro River has formed a wholly owned subsidiary named Petro Spring LLC to acquire and develop enhanced oil recovery technologies.
The company may move to horizontal wells if the geology allows.
“We’ve seen that vertical wells are more consistently economical in the Mississippian,” Smith said. “The Mississippian is not one size fits all, and you have to be judicious in how and where you drill.”
Petro River also has 20,000 acres in southwest Missouri, just over the state line from Fort Scott, and lease interests in Kentucky.
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