HOUSTON, TX--(Marketwire - Oct 22, 2012) - Vanguard Energy Corporation (OTCQX: VNGE), an oil development and production company, today announced that the Company has successfully drilled and completed three new oil wells on the Batson Dome Field in Southeast Texas. The new wells cost approximately $700,000 each and were drilled to a depth of approximately 3,000-4,000 feet.
Mr. Warren Dillard, President of Vanguard Energy, said, "We are very pleased with the initial results of this new drilling." The wells were financed with a portion of the proceeds from the Company's recently completed convertible note financing. The early production rates on the wells are on par with expectations and well above target production standards set by previous Batson Dome wells of approximately 20 barrels of oil per day per well.
Exact production rates will vary from well to well because of the nature of the field, which is highly fractured being on top of a salt dome. Also, the wells are producing from pay zones that are different in size and ultimate recovery rates. The company's wells are conventional, vertically drilled wells with no laterals and require no fracing. They produce oil only, no natural gas.
The Company utilized data from a 3-D seismic survey completed earlier this year on about half its lease position at Batson and this has proven extremely valuable in selecting exact well locations that will maximize the ultimate recovery of oil and basic well economics. The use of this data greatly enhances the accuracy of the drilling process and will continue to be of significant value as the Company expands its drilling program.
Due to the success of the seismic, the balance of the survey will be completed soon. The Company believes it has more than 50 potential total drilling locations on its current acreage in Batson Dome; this will be better determined once all the 3-D data is assembled and available for analysis.
The Company is currently producing at a rate of approximately 6,000 barrels of oil per month, which it will sell at a significant premium of $11.75 per barrel over normal WTI prices effective November 1, 2012. This important price differential is possible because of the proximity of the Batson Dome Field to several large refineries in Southeast Texas as well as the high quality oil the field produces.
"Although these wells do not have extremely high IP (initial production) rates, generally good wells in this field experience only a slow, gradual decline and they produce at predictable rates for the life of the well. This is possible since they produce from multiple zones and we can move up pipe to fresh zones as lower ones deplete. Well economics are still compelling with IRR's (Internal Rates of Return) between 80% and 100%, which is rare in today's market," Mr. Dillard went on to say.
"We are anxious to complete the 3-D seismic survey on our acreage and identify additional potential drilling locations for the field. It is possible that when we get off the salt dome we might encounter much deeper and more prolific production prospects."
Additional Leases Added
The Company has also added to its acreage position in the Hull-Daisetta Field, located approximately 10 miles south of the Batson Dome Field, and is preparing to drill at that location. It is expected the first well in the Hull-Daisetta Field, which is also over a salt dome, will begin later this year. The Company continues its efforts to increase its acreage position at Hull-Daisetta as part of its aggressive expansion program in Southeast Texas.
About Vanguard Energy
Vanguard Energy is an oil drilling and production company with a focus on established oil fields in southeast Texas. Concentrating on oil properties in established areas with proven production, Vanguard applies its managerial expertise to maximize production while minimizing risk. Vanguard is focused on creating shareholder value by building cash flow and oil reserves through an aggressive, focused acquisition and development program in the prolific southeast Texas oil producing region. Vanguard's initial area of operation is in the famous Batson Dome Field where it controls 500 strategic acres with substantial oil reserves. For more information visit the Company's website at www.vanguardenergycorp.com
This press release and other statements Vanguard Energy may make in the future contain forward-looking statements that relate to Vanguard's plans, objectives and future estimates. Various risks, uncertainties and other factors could cause actual results to differ materially from those expressed in any forward-looking statements. For a more detailed list of such risks, uncertainties and other factors, please refer to the Risk Factor section of Vanguard's Registration Statement on Form S-1 and in its periodic filings with the Securities and Exchange Commission. Vanguard makes no commitment to update any forward-looking statement, or to disclose any facts, events, or circumstances after the date of this release that may affect the accuracy of any forward-looking statement, except as may be required by applicable law.