Double Eagle Petroleum & Mining Co. Announces Key Royalty Interest and Drilling Unit Approval

Strategic Insights -

Double Eagle Petroleum & Mining Co. (DBLE) has made significant announcements regarding its royalty interests and drilling unit approval in the Sweetwater County and Fremont County areas of Wyoming. The company possesses a 1.25% overriding royalty interest in the Rock Island #4-H Unit Well, operated by Union Pacific Resources Corp. (UPRC), which is expected to yield substantial gas production from the Frontier Formation. Additionally, DBLE has received approval to establish and operate a 1,000-acre drilling unit within the Madden Unit in Fremont County, where it plans to drill the Allen #1 Deep well to evaluate the Lance Formation. This development is significant, as the Madden Unit is a major gas production area operated by Burlington Resources, Inc.

Key Takeaways:

  • Double Eagle Petroleum & Mining Co. (DBLE) owns a 1.25% overriding royalty interest in the Rock Island #4-H Unit Well, operated by Union Pacific Resources Corp. (UPRC), which will share in gas production from the Frontier Formation.
  • DBLE has received approval to establish and operate a 1,000-acre drilling unit within the Madden Unit in Fremont County, Wyoming, as part of its exploration efforts.
  • The Madden Unit, operated by Burlington Resources, Inc., is a significant gas production area with over 100 million cubic feet of natural gas produced per day from seven different formations.
  • DBLE will have a 12% working interest in the Allen #1 Deep well, which will be drilled to evaluate the Lance Formation, with Inexco Oil Company and Louisiana Land and Exploration, wholly owned subsidiaries of Burlington Resources Inc., holding the majority of the remaining interest.
  • Burlington Resources has 4 wells in the Madden Field producing from the Lance Formation, with a combined cumulative production of over 38 billion cubic feet of gas.
  • The Company expects to begin drilling by August 1999 and will draw on its experience in the Moxa Arch, Powder River Basin, Washakie Basin, and Wind River Basin areas of Wyoming.

Statistics:

  • The Rock Island #4-H Unit Well has a 17,874' horizontal well size.
  • The well offsets to the northeast a flowing natural gas discovery by Texaco, with a current production rate of 5 million cubic feet per day and cumulative production of over 3.2 billion cubic feet of gas.
  • DBLE has royalty interests in an additional 360 acres offsetting the participating area for the #4-H Well.
  • The Madden Unit produces over 100 million cubic feet of natural gas per day from seven different formations at depths of 3,000 to 25,000 feet.
  • Burlington Resources has 4 wells in the Madden Field producing from the Lance Formation, with a combined cumulative production of over 38 billion cubic feet of gas.

Sources:

  • PRNewswire, "Double Eagle Petroleum & Mining Co. Announces Key Royalty Interest and Drilling Unit Approval," March 23, 1999.
  • Form 10-KSB, Double Eagle Petroleum and Mining Co.