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Kentucky USA Energy has secured a 75% net revenue interest in a leasehold with proved undeveloped reserves covering an estimated 1750 to 2000 acres targeting the New Albany Shale in western Kentucky. The 15-year projection for the Western Kentucky Prospect’s gross cumulative cash flow is an estimated $120,000,000 at $6.00 per MCF.
The Western Kentucky Prospect offers the potential for tremendous cash flow, quick time to payback, significant return on investment and sustained production:
- Approximately 50 drilling locations at relatively shallow depths, averaging 1800 to 2500 feet vertically. To complete the well the operator would drill as many as 10 horizontal 1 ¼” lateral shafts out to about 500 feet
- Estimated recoverable reserves of 650 MMCF per well or 26 BCF for 40 locations - based on 40 acre spacing
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- Gas sales line runs through the property
- The AFE (Authority for Expenditure) is $325,000 per well, which includes surveying, permitting and drilling plus completion and tie-in
- Quick timeline per well—once permitted: 7-8 days to drill, 20- 25 days to complete, and 7-15 days to bring online.
- This timeline depends on the return of Nitrogen levels after the completion, and the availability of both equipment and materials.
- Direct offsets to 3 NGAS Resources, Inc. wells – 3 of which have been recently tested with flow rates of 810 to 850 MCFD
- Reasonable cost of acquisition— $1,900,000 to acquire the leases
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