On December 10, 2009, the Company purchased from Nadsoilco LLC a 30% gross working interest and a 22.5% net revenue interest in 214 contiguous acres which are the subject of the Davis-Holmes Leases and which are known as the Livingston Property.
The Davis-Holmes Leases consist of 214 contiguous acres in the Livingston Field in Polk County Texas. The Livingston Field was discovered in 1932 and produces from the Frio, Jackson, Yegua, Cook Mountain, Sparta and Wilcox Formations. The assets, situated on the land which is the subject of the Davis-Holmes Leases, have produced continuously since 1936, and the cumulative production from the Davis-Holmes Leases exceeds 1.2 million barrels of oil. The lease currently consists of six producing wells (#1, #2, #2A, #4, #10, #11), one salt water disposal well (#8), and one shut-in well (#1A).
Since 1970, production records for the current wells have shown essentially no production rate decline in the current wells. Today the wells collectively produce approximately 20 BOPD, There are approximately 105,000 barrels of recoverable reserves remaining in the currently producing formations, based on a 5% annual decline rate and a twenty-five year remaining life. There are additional proven behind pipe reserves which could and will be explored at a later date.
Compared with the Hartburg Project the Livingston Project is currently considered a non-material asset and is expected to remain that way until further geological and geophysical studies are performed within the lease area. Within the next 12 months the Company expects to review all available well logs, available three-dimensional seismic data, if available, and complete a review of the remaining potential at this lease. Based on the results of this study additional wells may be drilled and additional behind pipe zones may be perforated