DALLAS, TX -- (Marketwired) -- 06/24/13 -- Petron Energy II, Inc. (OTCBB: PEII) announced today its progress report on rework and pipeline operations in Oklahoma.
Petron Energy II, Inc., together with its subsidiaries, engages in the acquisition and development of properties for the production of crude oil and natural gas, transporting natural gas through its pipeline subsidiary and well servicing through its servicing subsidiary, in the United States.
Floyd Smith, President and CEO of Petron Energy II, Inc., states, "Petron Energy II, Inc. recently finalized terms on a credit facility agreement with TCA Global Master Fund ("TCA"), pursuant to which TCA shall extend to the Company a revolving line of credit for the maximum amount of $5 million dollars." For more details regarding the TCA Agreement, please consult the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on May 7, 2013. In connection with the TCA Agreement, "we are pleased to report that we received our first tranche of funding from TCA under this agreement."
Smith states, "We have identified 6 wells upon which we have begun rework and completion operations. If successful, these rework and completion operations are intended to return these wells to a condition suitable for commercial production. We have finalized completion operations on 4 of the 6 wells we have identified and we are 'flowing' the wells back." The Company anticipates that it will have additional information to report regarding production from these wells on or about the first week of July. The final two wells will have completion operations performed on them on or about the week of June 24, 2013. The Company anticipates that production results will be announced shortly thereafter.
Smith goes on to say, "Our plan in reworking these wells is to show improvement in our overall daily production rate. If we are able to show improvement on our daily production rate from these wells, we will qualify for a second tranche of funding from TCA pursuant to the TCA Agreement. We are estimating an improvement in our daily production rate in the range of 12 - 30BO/D collectively from the 6 wells." If the company's overall daily production rate from these wells improves significantly, the company anticipates that it will receive a tranche of funding from TCA for potentially up to $1 million dollars. This tranche size would provide the company with sufficient capital to rework an additional 20 - 35 existing wells and, if rework and completion operations on these wells are successful, may improve Petron II's daily production rate significantly. Under the TCA Agreement, the company will not qualify to receive a second tranche of funding until it has at least 6 weeks of production reports to determine the level of daily production improvements from the 6 reworked wells.
Smith further states, "We also have engaged Southridge Fund Management ("Southridge") to: (1) provide funding to satisfy our accounts payable; (2) fund an investor relations campaign to build awareness in the stock of the Company; and (3) provide the Company with a $10 million dollar equity purchase line of credit facility. Our engagement with Southridge is intended to: (1) strengthen the Company's balance sheet by satisfying our accounts payable; (2) improve our relationship with key investors in the market; and (3) provide the Company with capital so that it can expand its operations, boost profitability and reward our shareholders, who are at the core of our success."
Smith goes on to say, "We truly believe that Petron has a remarkable success story that merely needs to be shared with the broader investment community. Now that we are eligible for deposit with the Depository Trust Clearing Corporation ("DTC"), we are moving forward with an investor relations awareness campaign to inform the key actors in the marketplace of all of the great work that the Company has been doing." The company's goal is to have its stock trade more efficiently and to increase the number of shareholders of its stock. Petron II anticipates that this would increase the value of its stock, to the benefit of its existing shareholders. Once a vibrant market is re-established which allows for higher daily trading volume, greater liquidity and share price movement in its stock, the company will become more attractive for investment and will be able create value for its shareholders. The company is firmly committed to continuing to expand its operations, boosting its profitability and increasing awareness of all the great things being done at Petron Energy II, Inc.
The company's pipeline operations will benefit from recent rework operations as it expects natural gas production from some of the wells to improve flow rates in its gas pipeline system. Smith states "The most significant increase in pipeline flow rates could be realized from the Gerner Trust #1 well, which will be reworked on or about the week of June 24, 2013."
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