Xfuels Inc. is pleased to report that Cycle Oil & Gas began overseeing operations in their Wichita County field effectively on July 1st, 2022, through the purchase of leases & property from Triple “S” Gas & Ray Loveless Enterprises. Cycle Oil & Gas contracted OAG Consulting Inc. of Fort Wort, Texas to conduct due diligence prior to purchase & manage their Texas operations after the purchase and sale agreement was completed. When Cycle was handed operational duties, they were met with a variety of challenges from the distressed assets. Production across all 17 leases was ~7bpd with most of the wells labeled “inactive” or “shut-in” by the TXRRC’s standards.
Josh Miller (OAG) and the lease operators spent the months of July & August mitigating issues across the leases to increase runtime & reliability of their electrical infrastructure. Many of the properties had environmental concerns and time was spent on remediation to make sure the producing leases stayed within compliance with regulators at TXRRC. Cycle repaired multiple injection line leaks on their highest producing lease (Burnett) and weatherized electrical panels to allow for full capacity run time. Through these fixes, Cycle was able to increase production on this lease from 128bbls (4bpd) in August to 255bbls (8bpd) in September and have averaged 7.5bpd in the following months.
Cycle currently has workovers planned for 5 shallow wells on its Burnett Gulf lease in December. Cycle believes that these wells simply need pump changes, which are a quick and inexpensive fix that should yield an additional 8-10bpd in production. Cycle will continue working over wells on a lease-by-lease basis until all 17 leases are operational.
Cycle currently averages 12.5bpd as of Dec 1st, producing from 15 active wells. The company has continued to identify repairs that can increase production while being cost effective. Cycle also benefits from not having the added cost of hauling produced water off its leases for disposal and instead is able to inject produced water into their own injection wells. This allows for higher profit margins from production. To date; Cycle has increased monthly production from 231bbls per month in July & August, to an average of 345bbls per month since and is continuing to increase on a monthly basis. Cycle currently has over 125 shallow wells available to bring back into production through workovers and facility maintenance.