Encore Energy, Inc. has successfully drilled three of six planned horizontal Berea oil well projects along with three vertical Strat well sections, and has built roads, tank facilities, permitted well locations and significant infrastructure in Lawrence County, Kentucky. The Company is now strategically making future plans amid the unforeseen Covid 19 Pandemic.

WLING GREEN, KY. (PRWEB)

Encore’s JDH #5 reported strong oil fluorescence, oil cuts, oil shows in mud pit, strong gas kick(s), circulated oil while cementing casing, and the confidential mud log further reconfirms the Company's belief for the well's future production potential. All indications are that the JDH #5 is a Tier I oil producer while the JDH #4A is a gas producer. Encore's JDH #4A has been severely delayed and is currently awaiting connection to a gas pipeline in order to produce gas and/or oil. The Company is entering into an agreement to develop a gas pipeline for the JDH #4A and JDH #5 that should deliver the gas byproduct ~2.1 miles west to an existing gas market and processing facility. This system should provide the Company with improved control oil production rates/volumes in the future.

Tier I horizontal Berea oil wells in this area have reportedly averaged in the range of ~100 - 150 BOPD over the initial 90 days of production with up to an estimated EUR ~100000 - 150000 BOE high-side reserve target estimate per well. Berea oil production from Lawrence County, Kentucky reportedly represents nearly ~20 - 25% of the states total annual oil production.

“Encore is extremely confident regarding the drilling results at JDH #5 and super excited about the future Frac, well completion and production operations for this well,” said Steve Stengell, Encore's President and CEO. We are learning, perfecting our well plan and working with the brightest minds across the Berea play,” added Stengell. "The fact that SEC defined investors (SEC Reg D, 506c) can deduct 100% of their investment against all forms of income (state and federal) further mitigates much of the risk associated with these long-term projects,” added Stengell.

Encore is currently operating under a temporary "Covid-19" shutdown / quarantine – Force Majeure. Bowling Green remains under quarantine as one of the Covid 19 hotspots in Kentucky. Despite major delays from the shut-down, the Company is making plans for the JDH#5 Multi-stage Frac and Completion Operations, preparing for Gas right-of-way and pipeline at Peters Branch, JDH #6 (survey, well plan), WFC #H1 (Fallsburg) and #NB-2 Strat, and the Roppel #6 (Warsaw oil test – Warren County, Kentucky). The Company also making plans to drill a high-risk ~2000’ vertical gas/oil test at Sprouse Ridge, near the Riverside Community in Warren County, Kentucky.

In South Central Kentucky and at the JDH #NB-1A in East KY, the company is restricting production and shipments, as the price for crude has been at all record lows. As it relates more specifically to the Company’s field operations (Frac treatments, well completion, etc.), well service companies, court houses (necessary for survey and title), hotels for crews, etc. all remain under a quarantine.

The Company believes oil prices should regain ground from the temporary pullback in production and with strong demand for crude when our economy is reopened during the summer driving season. Encore also believes this “glut” or temporary “washout” for oil is good overall for the industry because oil production is finally starting to slow across the globe (i.e. lower future inventories / higher future prices). Again, lower gasoline prices to consumers during the summer driving season should boost the need and use for crude oil (i.e. pint up demand) in the short-term. Be sure to review the below article regarding future oil prices and the target of $65 by year-end.

“The Company should resume normal operations soon. We are confident that oil prices will rebound, and that this is the opportune time for investors to participate at a lower price structure and optimize reserves, long-term while receiving a 100% tax deduction. Investors that participate today investment at a lower well cost / price structure with production 6 – 12 months forward and higher price levels for crude,” added Stengell.”

Oil and gas investments are subject to a high degree of risk, uncertainty, unpredictability, indefinite delays, loss of investment and are suitable only for SEC defined accredited investors who are sophisticated in making business and investment decisions. No assurances can be made as it relates to production, income, distributions, reserves, cost overruns, profitability, prices, timelines and/or any other estimates.

KeyFacts Energy Industry Directory: Encore Energy

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