HOUSTON, July 15, 2020 (GLOBE NEWSWIRE) -- Alpha Energy, Inc. (OTC.PK - APHE) announced today a definitive Purchase and Sale Agreement with Pure Oil Company, Inc. and ZQH Holding, LLC to acquire oil and gas assets in Oklahoma in the Rogers Project.
Rogers Project
One of the acquisitions that we have targeted is a shallow gas well prospect located in Rogers County, Oklahoma. The Project consists of approximately 3,429 acres of proven developed and non-developed oil and gas leases. Alpha has acquired through assignment Pure and ZQHs’ 87.5% Working Interest in the Project. The current Operator is Premier Gas Company, LLC, who owns the residual interest. Alpha intends to assert that applicable agreements covering the Project give it the right to remove the current operator and select a new one. On July 6, 2020, Premier filed a mechanic’s lien in Rogers County alleging past unpaid invoices and also claiming incorrectly that Alpha’s ownership is 75% rather than 87.5%. No documentation has been provided Alpha of any past due invoices by Premier, Pure, or ZQH, and we intend to contest the lien vigorously. The leases contain 126 wells either producing or capable of being brought on line, four salt water injection wells, and well production equipment. Included is 20.5 miles of 4" gas gathering lines, four miles of 2" saltwater gathering lines, two delivery connections for natural gas sales and one LTX-LNG natural gas processing equipment. Since the infrastructure currently exists, it will reduce the capital necessary to increase production. Upon completion of the acquisition, the first objective is to recomplete, rework and repair older equipment. Once the first phase is complete and cash flow is established, phase two will be implemented. In phase two, Alpha intends to drill shallow wells in order to test formations from the Bartlesville (600') to the bottom of the Granite Wash (2,520'). Alpha anticipates that these operations increase total production and add reserves.
The Company notes that the Project is included in the lands in eastern Oklahoma affected by a decision of the U.S. Supreme Court issued on July 9, 2020. In McGirt v. Oklahoma the Supreme Court held that a large portion of eastern Oklahoma reserved for the Creek Nation in the 19th century remains Indian Country for purposes of the federal Major Crimes Act. The impact of this decision on title to the lands and leases included in the Project is uncertain at this point, and the Company will continue to monitor developments concerning the effects of this decision.
Management Commentary
John Lepin, the Company’s Chairman and Chief Financial Officer said, “Our strategy at Alpha is to identify assets that are shallow, have good infrastructure and multiple potential target zones that can be acquired for a competitive price given today’s economic environment. The Cherokee Platform and north-central Oklahoma offer many attractive opportunities to choose from for a company such as ours with little to no debt. The Rogers County Project definitely fits these criteria: it has excellent potential for production growth by producing existing wells, completing some of the defined margin wells in the upper zones, drill and complete offset locations on the current leases, lease additional acreage and develop for increased production. The leases and wells are located within three different areas in Rogers County. Upon acquisition and after settling outstanding issues with the current Operator, the first objective is to recomplete, rework and repair older equipment. Once the first phase is complete and cash flow is established, shallow well drilling will commence with phase two to test formations from the Bartlesville (600') to the bottom of the Granite Wash (2,520'). Alpha expects these operations will increase total production and add reserves. The project contains an existing gas pipeline.”
Alpha Energy, Inc. is a Houston, Texas based, independent energy company engaged in the acquisition, exploration, development and production of crude oil and natural gas. Additional information is available on the Company's website at www.alpha-energy.us.
