Viking Investments Group Inc (OTCMKTS: VKIN)
Coming off of the heels of its announcement for plans to purchase additional oil producing leasehold interest in Miami County, VKIN, on Wednesday, added to their aggressive 2017 strategic initiatives by announcing that the company , through its subsidiary, Mid-Con Petroleum, has entered into an agreement to drill new wells on one of its existing oil leases in Eastern Kansas.
The agreement, which was effective December 30, 2016, contemplates Mid-Con assigning a small percentage of its working interest ( 2%) in the ABC lease to an individual investor in exchange for that investor contributing financial capital, designated to facilitate the drilling and completion of 6 to 7 new producing wells on the lease property. VKIN is expected to maintain a 93% working interest in the lease.
Drilling To Details
Upon completion of the deal, the individual investor will receive 100% of the tax credits available in connection with the drilling investment. Additionally, the deal is contingent upon Mid-Con's senior secured lender, CrossFirst Bank, releasing its security interest against the 2% working interest being assigned to the investor. Approximately $150,000 has already been deposited by the investor and will be released for production use upon the successful assignment of the 2% interest being approved by CrossFirst.
Mid-Con's operator, S&B Operating, LLC, will coordinate and supervise the development initiative. S&B specializes in formulating and operating water-flood enhanced oil recovery programs and has been associated with both VKIN and Mid-Con projects prior to this most recent announcement.
The wells are expected to be drilled to a depth of approximately 350 feet, targeting the Peru formation. Wells similar to this lease have generated production assets for up to 30 years, which may allow VKIN to leverage additional growth strategies from its share of the revenues.
Viking operates as an independent exploration and development company, currently focused on both acquisition and development of oil and gas producing properties in North America. VKIN currently owns over 6000 acres of land in Kansas and Missouri, with additional land holds in Alberta.
VKIN's strategy is to target and acquire under-valued oil and gas producing companies and to take advantage of the assets available within those opportunities. The company has been on an aggressive path of late, announcing its second appreciable deal in as many days. Since the beginning of 2017, VKIN has been active in expanding its ownership and interest portfolio and appears to remain on point to further expand both its development and operating base to build shareholder value.
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