PGIE and PGI Energy

Home Creek Energy and PGI Energy (PGIE) have entered into a Joint Venture were Home Creek Energy is the operator. According to its website, PGI Energy has acquired a proven producing oil and gas asset in a field which is located in Haskell County, Texas. The field covers five leases with a total of eleven wells for production and two injection wells along wutgh pump jacks, tanks, tubing, rods and separators. Other well equipment is included as well. PGI Energy has purchased forty percent of the project for an amount which is undisclosed. Of the monthly production, PGI will receive forty percent of the net revenue interest which is seventy five percent. This lease is known as the Reames Lease

Below is the update for the Reames No.5 well which undergoing acidulation monday morning. Over the weekend, the previous lease wells performed well. The first load of oil should be scheduled for a pickup on wednesday while the current production of gas is selling at 58 MCF per day. These production rates are higher than initially though.

The Reames No.4 well has finalized and (the Rig) has moved off of the well location. There was some trouble in setting the packers in addition to retrieving the anchors due to a previous operation which had drilled through the bridge plate plug previously in order to take it to a lower perforation. This previous operation resulted in the walls of the casing to become uneven, although everything was manageable. Previously, the Reames No.4 has produced oil although it is considered to be a strong gas producer. The pump was moved up an additional 30 feet above its existing location in order to be free of obstruction and debris as debris was apparent in the pump when it was pulled. The fluid levels were around 1500 feet and the well did have pressure below. The well has been turned on and should start sending fluid to the tanks within a couple of hours.

The work over rig is on the Reames No.5 to begin fishing operations to repair the parted rod and to set the packer in order to begin the acidulation process on monday of next week.

Production over the past few days with the Reames No.1 and Reames No.2 online has resulted in 32 barrels of oil from the wells along with an average of 42 mcf per day. Although the wells will settle down over the weekend, the initial numbers we better than previously anticipated. There is still strong fluid recovery from the Reames No.1 and Reames No.2 wells with the Reames No.2 well producing a frothy oil mix. This frothy oil mix shows to be loaded with natural gas. It is projected that a load of oil will be ready for sale at some point in the middle of next week. The Reames No.1 and Reames No.2 wells are both producing from the conglomerate and are in a similar position as the Masterson wells that will be coming online soon. It is expected that the Masterson wells, in which PGIE - PGI Energy ownes 100% Working Interest on will receive above average numbers as well.

The work over rig is on location at the Reames # 4 well and pulling the pump. The crew did find that there were parted rods which was preventing the well from pumping. This is considered to be a good sign in that the well hasn't been pumping although there had been some gas pressure and fluid. Another good sign is that the fluid is at 4000 feet high, indicating bottom hole pressure. A rattlesnake visited the site as well.