OIL CITY, La., Dec. 22, 2009 (GLOBE NEWSWIRE) -- Black Dragon Resource Companies, Inc.'s ("the Company", "Dragon") (Pink Sheets:BDGR) Chairman and CEO Mr. Scott D. Smith, announces today that Dragon has acquired a 6.25% working interest in the Humble Salt Dome EOR Project located near Houston, TX. This project utilizes a patented EOR chemical via steam injection to bolster production after initial revenues begin to decrease. Surface operations have already commenced and the initial well should be drilled in the very near future, stated Mr. Smith. The plan for the project is to drill a five well pattern, each of which are producers initially, and once production slows, a centrally located well will be converted to an injection well, optimizing recovery percentages for the remaining four wells. If this initial five well pattern is successful, two more patterns may possibly be drilled in this same manner. Dragon is working to acquire additional interest in this project as it can.
Mr. Smith went on to state that the recently drilled Paluxy well, in which Dragon acquired a small overriding royalty interest, has flushed in around 15 barrels per day. Also, Dragon has contracted a company to complete the two recently drilled gas wells on the 640 acre lease, via air drilling. These gas wells must be completed in this manner to minimize the risk of excess salt water disposal costs that can easily remove profitability from this type of well.
Dragon also is working to achieve a deal with its primary operator, Four Star Oil Company, so that Dragon can receive a larger percentage of its revenues that have been previously pledged for debt. This negotiation will free up operating capital to fund new exploration projects on Dragon's highest Net Revenue Interest leases, as well as to allocate funding toward rework operations on existing wells and leases that are not producing to their maximum ability, or in some cases at all. Mr. Smith hopes that this change will loosen the constraints on cash flow for the company so that he is able to continue to add acreage and interest to Dragon's portfolio, as well as to increase its production numbers.
Black Dragon is an oil and gas exploration and production company currently focused on the acquisition of mature, producing and existing domestic oil and gas fields. This focus has eliminated exploration risk, reduced costs of completion, and provided rapid generation of income in a niche market where larger independent and major oil companies are not positioned to compete. Black Dragon intends to recomplete additional shallow producing wells and to expand its focus to include drilling of new wells some to deeper levels and to purchase additional leases.
Forward-Looking Statements - Safe Harbor:
Certain information discussed in this press release may constitute forward-looking statements within the Private Securities Litigation Reform Act of 1995 and the federal securities laws. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions at the time made, it can give no assurance that its expectations will be achieved. Readers are cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements are inherently subject to unpredictable and unanticipated risks, trends and uncertainties such as the Company's inability to accurately forecast its operating results; the Company's potential inability to achieve profitability or generate positive cash flow; the availability of financing; and other risks associated with the Company's business. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.