NEW YORK--(BUSINESS WIRE)--American Energy Development Corp. (AED) (OTCBB:AEDC) an emerging energy company involved in the acquisition, exploration, development and production of established oil and gas basins, is pleased to provide an update on Michigan operations, and other industry news within the state.
Located in Ingham County, Southern Michigan, the Dansville Prospect contains 3 potential Niagaran reef formations. To date, two of the identified reef prospects have been drilled with the first well, Brown 2-12, on production and yielding cash-flow to AED. The well site locations for the drilling program were selected using AED's high resolution 3-D seismic isochrones, which we believe define the heart of the anomalies.
Production from the first well, Brown 2-12, continues to show no decline with zero water production. We expect with the well maturing, production stability will increase which will subsequently lead to increased production. Since start-up, daily production has increased by 14.6%, with AED commissioning Netherland, Sewell & Associates Inc. to undertake a reserve report on the well, which we hope should enable AED to book proven oil reserves under SEC reporting guidelines.
The second well, the Cremer 1-1, was cement plugged following geophysical logging for density, porosity and water saturation, in order to determine reservoir size, quality and deliverability. It has been determined that during drilling stage, the flank of the structure was encountered, with the presence of salt plugging in the drilled area of the formation. AED and its operating partner are currently evaluating completion and development opportunities for the well, which include sidetracking.
Data from drilling the first two wells, along with AED's 12,300 acre database of high resolution 3-D seismic data, are being re-evaluated, with special focus on salt formations and properties for the prospective third well, the Bowen well.
"The Brown 2-12 continues to yield cashflow to AED and is proving to be a reliable producer for us, delivering premium oil and zero water," noted Joel Felix, CFO of AED. "We are continuing to develop the Dansville prospect with the goal to increase our near-term revenues."
With the expansion into Northern Michigan, AED has increased its presence in the state's prolific Niagaran reef play, and brings the company's total Michigan acreage to more than 5,300 acres.
Located on approximately 4,000 acres in Northern Michigan, the White-tail prospect is found in an area which contains over 110 oil fields with reserves larger than 1 million barrels, with the average size of these fields being approximately 2.4 million barrels recoverable. The largest reefs drilled in the area are the Chester 18A field, with 14 million barrels of recoverable oil, drilled by Royal Dutch Shell, and the Grant 13 field, which has approximately 47 billion cubic feet of recoverable natural gas.
Data from the initial seismic survey on the acreage has identified 5 separate reef prospects. AED plans on initiating the new high resolution 3-D seismic survey to clearly define prospective well sites. The company and its partners will define future well sites using the latest geological, geophysical, and environmental technology to minimize risk for the subsequent drilling program.
Herold Ribsskog, CEO of AED, commented: "AED and its operating partner are in the process of going out to tender for the high resolution seismic shoot. Following the seismic shoot, we aim to replicate the same success on White-tail as we have had on the Dansville drilling program."
According to the USGS report on the basin, the recoverable reserves are in excess of 1.8 billion barrels of oil and 17 trillion cubic feet of natural gas. There are a total of 4,212 wells that have reported production from the Niagaran reefs in Michigan. These reefs have produced a total of 472 million barrels oil and 2.8 trillion cubic feet of natural gas. Royal Dutch Shell (NYSE: RDS.A) has been a major player in the state having drilled and produced from over 490 wells.
Players in Michigan include Devon Energy (NYSE:DVN), which has amassed 240,000 net acres, and according to the company has 1.54 billion BOE in unrisked resources. The company recently signed a $2.2 Billion Transaction with Sinopec International Petroleum Exploration & Production Corporation (NYSE:SNP) to drill and develop Devon’s asset base. Other players in Michigan include Encana (NYSE:ECA) with 430,000 net acres, who drilled two horizontal wells in 2011, Chesapeake Energy (NYSE: CHK) with 450,000 acres, and the recently acquired Atlas Energy, owned by Chevron (NYSE:CVX), with over 380,000 net acres.
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About American Energy Development Corp.
American Energy Development Corp. is an independent US energy company, committed to creating American energy independence through the development of acreage in established oil and gas basins. Using the latest geological, geophysical, and environmental technology, the Company's goal is to locate, drill, and produce oil and gas in the United States and secure regions. American Energy Development's focus is on the development of Niagaran oil reefs in Michigan and the underexplored onshore basins in the United Kingdom.
Forward Looking Statements
This press release contains forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended) concerning future events and the Company's growth and business strategy. Words such as "expects," "will," "intends," "plans," "believes," "anticipates," "hopes," "estimates," and variations on such words and similar expressions are intended to identify forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates that are inherently subject to significant uncertainties and contingencies, many of which are beyond the control of the Company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, risks associated with drilling and production programs resulting from geological, technical, drilling, seismic and other unforeseen problems; unexpected results of exploration and development drilling and related activities; continued availability of capital and financing; increases in operating costs; risks associated with oil and gas operations in general; availability of skilled personnel; unpredictable weather conditions; and other factors listed from time to time in the Company's filings with the Securities and Exchange Commission. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company's expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based.
Cautionary Note to U.S. Investors - The United States Securities and Exchange Commission permits oil and gas companies, in their filings with the SEC, to disclose only reserves that comply with the definitions presented at Rule 4-10(a) of Regulation S-X. We use certain terms in this press release that the SEC's guidelines strictly prohibit us from including in filings with the SEC. Examples of such disclosures would be statements regarding "probable," "possible," or "recoverable" "reserves" and "resources" among others. U.S. Investors are urged to consider closely the disclosure in our Annual Report on Form 10-K and Form S-1, File No. 333-169014, available from us at American Energy Development Corp., 1230 Avenue of the Americas, 7th Floor, New York, NY 10020.
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