Virtus Oil and Gas Corp. will acquire 10 net mineral acres in Weld County, Colo., and Hitchcock County, Neb. The company and a subsidiary recently completed and executed a letter agreement with Kansas Alliance Resources LLC and BYA Energy LLC for the acreage, Virtus said May 17.
The 10 acres in Weld County will be acquired under a producing well. A 5% working interest and a 1% overriding royalty will be acquired in Hitchcock County.
The Grant Hurt 1A-14H G268 well operated by Encana Oil & Gas (USA) Inc. is in the Wattenberg Field within the D-J Basin in Weld County. Multiple Niobrara targets, Codell, Sussex, Shannon and deeper J Sand formations are the main producing areas.
Encana completed the Grant Hurt 1A, a horizontal well, at 7,400 ft deep with a 6,886 ft lateral leg. The well was completed in April of 2015, and from April 2015 to February 2016 has produced 60,960 barrels of oil (bbl), and has also produced gas, from the Codell Formation.
Encana has already submitted, and been approved for, permits and spacing units to drill 12 additional horizontal Niobrara B, Niobrara C and Codell wells that would include the company-owned minerals.
The Hitchcock County acreage in Nebraska covers the Husker prospect on 5,108.42 gross acres, which have the Golding 1-4 and Golding 1-5 wells currently producing from the Lansing-Kansas City Formation. They are operated by Central Operating Inc., and are in sections 4 and 5 of 1N-35W.
These shallow vertical wells were drilled and completed between late 2014 and early 2015 between 4,000 ft and 4,250 ft deep.
Central Operating has proposed a drilling program, which it will begin when oil prices rise, Virtus said, noting that on 40-acre spacing, the entire 5,108.42 gross acres could potentially hold up to 120 vertical wells.
According to the terms of consideration in the letter agreement, Virtus will provide Kansas Alliance/BYA Energy 5 million of its common shares at a value of $100,000. The company said that Kansas Allian