The McMurtry/Loving Leases are located on the boundary between Jack and Young Counties in Texas. The asset is situated on the north end of the Fort Worth Basin, on the east flank of the Bend Arch. Young County is bounded by Archer County to the north, Jack County to the east, Stephens County to the south and Throckmorton County to the west. Young County covers 931 square miles. Jack County is bounded by Archer, Clay, and Montague Counties to North, Young County to the west, Palo Pinto and Parker Counties to the south, and Wise County to the east. Jack County covers 920 square miles.
The McMurtry lease covers 530 net acres in Young County and has three producing wells and two shut-in wells. The Loving Estate lease, located in Jack County, contains 980 net acres. There ae two producing wells, six shut-in wells, and a water disposal well. The wells produce from the Marble Falls and Conglomerate zones. The formations are at depths of 4,000 feet.
The lease has been productive since the early 1980s, and the three separate horizons have collectively produced over 76 MBO of oil and 203 MMCF gas. The Caddo Formation is a well-known waterflood candidate in this area.
Permex believes the lease has excellent secondary recovery potential and would benefit from a water injection scheme. Permex plans to exploit the large acreage position by in-fill drilling. All of the shut-in wells will be returned to production, perforate and open the Caddo formation in anticipation of the initiation of a full scale water flood EOR on the acreage. The Caddo formation in this area is a good water flood zone.
Permex holds 100% Working Interst in the lease and 75% NRI
The Permex lands are productive from three separate Formations, the Bryson, the Caddo and the Marble Falls Limestone. The deepest of the producing Formations is the Marble Falls Limestone which occurs at about 4,500 feet. The Marble Falls Limestone is a thick, brittle crystalline limestone dominated by natural fracturing with little or no primary porosity. Production from the formation is dependent on the amount of fracturing encountered in the zone. Moving up hole, the middle producing interval is the Caddo Formation, at approximately 4,300 feet depth. Where the Caddo is of reservoir quality, it usually consists of sands deposited on a large delta plain. Above the Caddo are the sediments collectively referred to as the Strawn. The Bryson is the most prolific of all the Strawn Formations, and it occurs at a depth of approximately 3,200 feet on the Permex Lease. The Bryson consists of a sandstone that often includes an interstitial shale having iron carbonate cement.