Blugrass Energy, Inc. and Quad Energy Corp Execute LOI to Acquire 60%
Working Interest in Blugrass Energy Inc.'s Eddy County Oil and Gas
CALGARY, AB -- (Marketwire) -- 12/07/10 -- Blugrass Energy, Inc.
(OTCBB: BLUG) and Quad Energy Corp have entered into a letter of
intent to acquire a 60% working interest in Blugrass Energy Inc's
Cave Pool Unit oil and gas properties. The working interest of
Blugrass Energy's properties covers approximately 2800 acres, located
within Eddy County, NM. Currently there are 32 wells, which could be
re-worked and brought back potentially to producing status.
Additionally, there are over 100 possible new drilling locations
based upon 20 acre spacing. Water disposal would be handled via the
Cave Pool Unit's injection well which decreases water hauling costs
thus increasing the economics of the Cave Pool Unit.
The Cave Pool Unit is located within the Artesia Vacuum Trend, more
specifically within the Grayburg Jackson Pool. The Artesia Vacuum
Trend contains thirteen reservoirs with more than 1 MMBO historic
cumulative production. Cumulative production from these 13 reservoirs
was 796 MMBO as of 2000. Depths to the top of reservoirs range from
1290 to 4700 ft. This is a mature field, especially within the highly
productive San Andres carbonates. Lower permeability in the Grayburg
sandstones, in the Grayburg Jackson reservoir during the mid-1990's,
has been successful to the point of reversing production decline and
is a major focus of current and future development.
Under the terms of the LOI Quad Energy would pay up to $500,000 for
Blugrass' 60% working interest in the Cave Pool Unit.
The Quad Energy is undertaking due diligence and will announce the
signing of a definitive agreement in the event that one is signed.
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Blugrass Energy Inc. is a development stage oil and
gas development and exploration company based in the United States
that is traded on the Over the Counter Bulletin Board under the
Symbol BLUG. The goal of BLUG is to grow through internally generated
and developed prospects, participation with industry partners in oil
and gas exploration and in targeted joint ventures.
Blugrass Energy Inc.
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