EnerJex Resources Announces A 50% Increase In Oil Production From Its Mississippian Project
SAN ANTONIO, May 24, 2012 /PRNewswire/ -- EnerJex Resources, Inc. (ENRJ.OB) ("EnerJex" or the "Company"), a domestic onshore oil company, announced today that it has completed 7 new oil wells and 1 new secondary recovery water injection well in its Mississippian Project located in Southeast Kansas. Year-to-date, the Company has drilled 12 new oil wells and 1 new injection well with a 100% success rate. Nine of the 12 new oil wells have begun producing and the remaining wells are expected to be placed online in the near term.
Results from this drilling program have exceeded management's expectations, and production from this project has increased by 50% since the end of 2011 to approximately 150 barrels of oil per day. EnerJex intends to accelerate its drilling program in this project, where it has identified approximately 500 additional low-risk oil drilling locations.
In addition, the Company intends to implement secondary recovery throughout its entire Mississippian Project, where management has identified hundreds of water injection drilling locations. Secondary recovery, also known as waterflooding, is a method by which water is injected into the producing oil formation in order to increase reservoir pressure and drive oil to the nearby producing wellbores. This process is typically implemented by drilling one water injection well in the middle of every four oil production wells.
The Mississippian formation has responded very favorably to water injection in the project area, resulting in oil production increases of up to 1,000%. Management estimates that EnerJex's Mississippian Project acreage has produced approximately 5.3 million barrels of oil since 1920, and believes it is an ideal candidate for secondary recovery. EnerJex drilled a limited number of water injection wells on two leases in this project during 2011. Oil production from these leases began increasing approximately 6 to 9 months after water injection was initiated, and oil production from both leases continues to rise.
EnerJex's CEO, Robert Watson, Jr., said, "I am very pleased with the results of EnerJex's Mississippian drilling program, which more than validate our confidence in this project's ability to drive significant near term growth in the Company's oil production, reserves, and cash flow. This project affords EnerJex with hundreds of low-cost, low-risk development drilling locations that provide exceptional return on capital employed, and I have never been more excited about the Company's future."
About EnerJex Resources, Inc.
EnerJex is a domestic onshore oil company with assets located in Eastern Kansas and South Texas. The Company's primary business is to acquire, develop, explore and produce oil properties onshore in the United States. Additional information is available on the Company's web site at www.enerjex.com.
This press release and the materials referenced herein include "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements give EnerJex's current expectations or forecasts of future events. The statements in this press release regarding the acquisition of operating assets and related agreements; any implied or perceived benefits from any current or future transaction, and any other effects resulting from any of the above, are forward-looking statements. Such statements involve risks and uncertainties, including but not limited to: whether acquired properties will produce at levels consistent with management's expectations; market conditions; the ability of EnerJex to obtain financing for continued drilling; the costs of operations; delays, and any other difficulties related to producing oil; the ability of EnerJex to integrate the newly purchased assets and any newly acquired employees; the price of oil; EnerJex's ability to market and sell produced minerals; the risks and effects of legal and administrative proceedings and governmental regulation; future financial and operational results; competition; general economic conditions; the results to be achieved with various drilling techniques; and the ability to manage and continue growth. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. Important factors that could cause actual results to differ materially from the forward-looking statements are set forth in our Form 10-K filed with the United States Securities and Exchange Commission and our Form 10-Q. EnerJex undertakes no obligation to revise or update such statements to reflect current events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. EnerJex's production forecasts are dependent upon many assumptions, including estimates of production decline rates from existing wells and the outcome of future drilling activity. Although EnerJex believes the expectations and forecasts reflected in these and other forward-looking statements are reasonable, it can give no assurance they will prove to have been correct. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties.
Brad Holmes, Investor Relations
Robert Watson, Jr. CEO