ENERJEX RESOURCES ANNOUNCES MAJOR EXPANSION OF ITS MISSISSIPPIAN OIL PROJECT AND SUCCESSFUL PRELIMINARY DRILLING RESULTS
San Antonio, Texas / Denver, Colorado / Kansas City, Missouri (December 31, 2013) – EnerJex Resources, Inc. (OTCMarkets: ENRJ) (“EnerJex” or the “Company”) announced today that it has doubled its acreage position in the Company’s Mississippian Oil Project from 2,840 gross (2,556 net) acres to 6,370 gross (5,267 net) acres.
The expansion acreage is located in Woodson County, Kansas, in close proximity to EnerJex’s existing operations. Included is a 90% working interest in 1,200 acres located directly adjacent to acreage that the Company successfully developed in 2013, which is in the early stage of secondary recovery. EnerJex expects to drill approximately 100 oil wells on this new acreage, and management expects this expansion to contribute new proved reserves to the Company’s year-end reserve report. EnerJex earned this acreage after achieving certain development milestones related to the adjacent acreage, and it expects to earn another 320 acres in this area after achieving additional development milestones.
Also included in the expansion is a 70% working interest in 2,330 acres located approximately five miles away from the Company’s producing properties. This acreage is exploratory and has higher potential for oil production and reserves due to higher anticipated reservoir pressure. EnerJex has already participated in drilling two new wells on this acreage during the past month, both of which appear to be successful and are in the process of being completed. This acreage is located in an area that has been sparsely developed although multiple prolific wells were drilled nearby in the 1950’s.
EnerJex’s Mississippian Project produces approximately 200 barrels of oil per day from vertical wells completed in the Mississippian formation at a depth of approximately 1,700 feet. In addition to drilling dozens of new oil wells in this project, the Company has drilled more than 40 secondary recovery water injection wells that are expected to increase reservoir pressure and oil production throughout 2014. This project is characterized by low production decline rates and has an estimated economic life of 50 years.
Management Comments
EnerJex’s CEO, Robert Watson, Jr., commented, “I expect this expansion to result in a significant increase in shareholder value, and I am excited about the exploration potential of the new acreage position. While I am pleased to make this announcement, it does not temper my enthusiasm for the Company’s recently completed merger. The first three re-entries at EnerJex’s Adena Field asset in Colorado appear to have achieved a combined stabilized production rate of more than 30 barrels of oil per day, which is inline with management’s expectations and higher than what is reflected in the Company’s reserve report. Additional re-entries are currently in progress, and the fourth well appears to be capable of producing at a higher rate than any of the first three.”
About EnerJex Resources, Inc.
EnerJex Resources, Inc. is an independent exploration and production company focused on the acquisition and development of oil and natural gas properties located in the mid-continent region of the United States. The Company owns oil and gas leases covering approximately 100,000 acres in multiple prolific hydrocarbon basins located in four states including Colorado, Kansas, Nebraska, and Texas.
EnerJex’s operations are focused in five distinct projects where the company produces oil and natural gas from shallow reservoirs that are characterized by long lived reserves with low production decline rates. Within these projects, the Company has identified more than 500 low-risk drilling locations. Through its large acreage footprint in the Denver-Julesburg (“DJ”) Basin, EnerJex also has significant exposure to emerging oil resource plays that are being pursued by numerous competitors on trend with the Company’s properties. EnerJex’s headquarters are located in San Antonio, Texas, and additional information is available on its website at www.enerjex.com.