Xun Energy Acquires 3 Oil And Gas Leases
London, KY (Marketwire) - Xun Energy, Inc. ("XNRG") (OTCBB: XNRG) announces the Company has acquired three oil and gas leases in Kentucky through its wholly owned subsidiary, Nux Holdings of Kentucky, Inc. from Sequachee Oil and Gas LLC. (Sequachee).
XNRG entered into three leasehold assignments with Sequachee whereby Sequachee retains an override royalty equal to 12.5% and each of the landowners will receive a royalty of 12.5% of the value of all oil produced and removed (if any) under the lease. The Company will own 100% of the Working Interest and 75% of the Net Revenue Interest in these leases for oil and gas.
The Tillet lease is approximately 105 acres and is located in Lincoln County, Kentucky. The lease has five shut in oil wells that have been drilled to a depth of 350 to 385 feet. The wells are drilled to the Coniferous producing formation.
The Neeley lease is approximately 239 acres and is located in Jackson County, Kentucky. The lease has one oil well that is currently on pump, but not pumping to generate revenue. The well is drilled to the Coniferous producing formation.
The Gross lease is approximately 30 acres and is located in Clay County, Kentucky. The lease has one gas well that is not connected to a gas pipeline system. The well produced oil from the Stones River formation at a depth of 3,200 feet.
Xun Oil of Kentucky, Inc., a wholly owned subsidiary of the Company, and Nux Holdings of Kentucky, Inc. forms the Oil and Gas Division of the Company (Xun Oil). Xun Oil intends to rework/enhance existing producing and non-producing oil wells by re-entering the well, examine the well logs and the well bore to determine whether or not the well can be stimulated or enhanced to produce/increase production of oil. The Company estimates that a well rework can range from a few thousand dollars to $50,000 which would include drilling the well to deeper formations or drilling a parallel new well.
"We are excited to enter the oil and gas industry with a low cost to the Company," commented Peter Matousek, president of the Company. He further commented, "We believe that in Kentucky we can acquire additional oil and gas leases for a relatively low cost and by re-working the wells, enhance the wells to produce oil and gas. Of course, not all reworks will be success stories. However, we can mitigate the Company's exposure as compared to wild cat drilling programs."
About XNRG
Xun Energy, Inc. is a development stage company with limited assets. The Company's prospects will be subject to securing financing and the success of the drilling, exploration and rework/enhancement programs.
This Press Release contains forward-looking information within the meaning of section 27A of the Securities Act of 1933 and section 21E of the Securities Exchange Act of 1934 and is subject to the Safe Harbor created by those sections. This material contains statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. For those statements, we claim the protection of the safe harbor for forward-looking statements provisions contained in the Private Securities Litigation Reform Act of 1995 and any amendments thereto. Such forward-looking statements by definition involve risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. In particular, there is no assurance that reserves, production, pricing levels or other factors pertaining to the oil and gas operations will be sustained at the expected rates or levels over time. Discussions of factors, which may affect future results, are contained in our recent filings. Under no circumstances does this Press Release constitute an offer to sell or a solicitation of an offer to buy the securities of the company described in this Press Release in which such offer, solicitation or sale of securities would be unlawful prior to registration, qualification or filing under the securities laws of any jurisdiction.
SOURCE: Xun Energy, Inc.