City Capital Corporation's (OTC BB:CCCN.OB - News) wholly owned subsidiary, Goshen Energy Resources, has initiated production with the first of four wells in the West Delta 25 gas producing offshore platform. Well Number One is currently averaging 400 thousand cubic feet (mcf) per day, running at approximately 20% capacity while all systems are being brought on line. The West Delta platform is located in the Gulf of Mexico, and has three additional existing wells which the company is also preparing to bring online.
Goshen president Harvey E. Lynch, Sr. explained, "Like many offshore platforms, West Delta was damaged by Katrina in 2005. The previous owners chose not to repair the older inefficient pump which had been in place since the well was first established, but chose instead to shut down the rig. City Capital's first decision was to replace the older compressor with a newer, more efficient one. This was a larger initial capital outlay, but it succeeded in making the entire operation significantly more cost-effective."
William Clay Kimbrell, P.E., C.P.G. of Kimbrell and Associates of Baton Rouge, certified the West Delta reserves at $38 million based on conservative pricing of only $5.00 per mcf for natural gas. Kimbrell is a registered professional engineer with Kimbrell and Associates, certified members of the American Institute of Professional Geologists and one of the most experienced Oil and Gas Engineering firms in Louisiana. The conservative estimate is well below recent spot market pricing for natural gas of $7.64/mcf. Upcoming winter season pricing is projected even higher, at over $9.00/mcf, or almost double the "rule of thumb" rate used in the evaluation. (source: www.eia.doe.gov)
"It's only been a little over 90 days since we closed on the Goshen property," added City Capital CEO Ephren W. Taylor II. "With approximately 8 Billion cubic feet of certified gas reserves, we figured spending around $250,000.00 to rework the well was a prudent decision. We feel the energy market will continue its general upward trend, as world market conditions are more and more affected by political instability in key production countries."
Goshen's West Delta property includes 3900 additional acres in which the company can perform additional drilling and exploration. The company has identified several key areas to enhance production and maximize profits, including the acquisition of a producing oil well with estimated crude oil reserves of 600,000 barrels, which the company closed on in April 2007. Goshen Energy Resources is engaged in the buying, selling & drilling of oil & gas properties in South Louisiana.
Source : www.citycapcorp.com
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