South Texas Oil Company Provides Interim Activity Update
AUSTIN, Texas, April 30 /PRNewswire-FirstCall/ — South Texas Oil Company today announced an interim activity update on its South Texas operations. On April 28, 2008, the Company reached total depth of 7,065 feet on the McPhaul No. 1 well (STXX-operated — 100% WI). The vertical well was drilled to test the Buda and Austin Chalk formations and experienced multiple oil and gas shows while drilling through the primary objectives. Based on log data and the encouraging oil and gas shows, the Company ran pipe on the well and is currently moving a completion rig on the well site to stimulate and complete the well in the Buda Limestone Formation with up-hole potential in the Austin Chalk formation.
The well marks the inaugural well in the 2008 South Texas Oil drilling program. Based on the initial results, which should be re-confirmed upon completing the well and recording initial production rates, the Company believes that the McPhaul discovery well sets up multiple offset, development drilling locations which are likely to be drilled horizontally going forward. The McPhaul well is located in Company’s core Bastrop area where it controls approximately 8,500 net mineral acres.
About South Texas Oil Company
Austin-based South Texas Oil Company acquires, explores and exploits predominantly oil-bearing formations in its core operating areas in south-central and southwest Texas, and in the DJ Basin of northeast Colorado. The Company has a high-working-interest inventory of drillable locations within its operating areas. The Company anticipates investing growth capital in both its Texas assets as well as its DJ Basin properties in Colorado. Two Company-owned rigs will be utilized to help develop the Company’s successful Bastrop core operating area as well as other assets in the South Texas portfolio. The Company currently is evaluating existing wellbores in the Giddings Field for re-entry possibilities that can enhance production and estimated ultimate recoveries. The Company is also evaluating infill drilling locations in Kyote and Bigfoot Fields.
Forward-looking Statements
Certain statements made in this press release contain forward-looking statements that involve a number of risks and uncertainties. This forward-looking information is based on certain assumptions, including, among others, presently known physical data concerning size and character of reservoirs and economic recoverability. Some of these expectations may be based upon assumptions or judgments that prove to be incorrect. In addition, operations involve numerous risks and uncertainties, many of which are beyond South Texas Oil’s control, which could result in expectations not being realized or otherwise materially affect the financial condition, results of operation and cash flows. Additional information regarding these and other risks are contained in South Texas Oil’s filings with the Securities and Exchange Commission.
South Texas Oil Company
CONTACT: J. Scott Zimmerman, President and CEO of South Texas OilCompany, +1-512-772-2474, fax +1-512-263-5046
Web site: http://www.southtexasoil.com/