American Energy Development Corp. (AED) (OTCBB:AEDC) an
emerging energy company involved in the acquisition, exploration,
development and production of established oil and gas basins, is
pleased to provide an update on Michigan operations, and other
industry news within the state.
AED drilling a well on the Dansville
Prospect. (Photo: Business Wire)
Dansville ProspectLocated in Ingham County, Southern
Michigan, the Dansville Prospect contains 3 potential Niagaran reef
formations. To date, two of the identified reef prospects have been
drilled with the first well, Brown 2-12, on production and yielding
cash-flow to AED. The well site locations for the drilling program
were selected using AED's high resolution 3-D seismic isochrones,
which we believe define the heart of the anomalies.
Production from the first well, Brown 2-12, continues to show no
decline with zero water production. We expect with the well
maturing, production stability will increase which will
subsequently lead to increased production. Since start-up, daily
production has increased by 14.6%, with AED commissioning
Netherland, Sewell & Associates Inc. to undertake a reserve
report on the well, which we hope should enable AED to book proven
oil reserves under SEC reporting guidelines.
The second well, the Cremer 1-1, was cement plugged following
geophysical logging for density, porosity and water saturation, in
order to determine reservoir size, quality and deliverability. It
has been determined that during drilling stage, the flank of the
structure was encountered, with the presence of salt plugging in
the drilled area of the formation. AED and its operating partner
are currently evaluating completion and development opportunities
for the well, which include sidetracking.
Data from drilling the first two wells, along with AED's 12,300
acre database of high resolution 3-D seismic data, are being
re-evaluated, with special focus on salt formations and properties
for the prospective third well, the Bowen well.
"The Brown 2-12 continues to yield cashflow to AED and is
proving to be a reliable producer for us, delivering premium oil
and zero water," noted Joel Felix, CFO of AED. "We are continuing
to develop the Dansville prospect with the goal to increase our
near-term revenues."
White-tail ProspectWith the expansion into Northern
Michigan, AED has increased its presence in the state's prolific
Niagaran reef play, and brings the company's total Michigan acreage
to more than 5,300 acres.
Located on approximately 4,000 acres in Northern Michigan, the
White-tail prospect is found in an area which contains over 110 oil
fields with reserves larger than 1 million barrels, with the
average size of these fields being approximately 2.4 million
barrels recoverable. The largest reefs drilled in the area are the
Chester 18A field, with 14 million barrels of recoverable oil,
drilled by Royal Dutch Shell, and the Grant 13 field, which has
approximately 47 billion cubic feet of recoverable natural gas.
Data from the initial seismic survey on the acreage has
identified 5 separate reef prospects. AED plans on initiating the
new high resolution 3-D seismic survey to clearly define
prospective well sites. The company and its partners will define
future well sites using the latest geological, geophysical, and
environmental technology to minimize risk for the subsequent
drilling program.
Herold Ribsskog, CEO of AED, commented: "AED and its operating
partner are in the process of going out to tender for the high
resolution seismic shoot. Following the seismic shoot, we aim to
replicate the same success on White-tail as we have had on the
Dansville drilling program."
Michigan ActivitiesAccording to the USGS report on the
basin, the recoverable reserves are in excess of 1.8 billion
barrels of oil and 17 trillion cubic feet of natural gas. There are
a total of 4,212 wells that have reported production from the
Niagaran reefs in Michigan. These reefs have produced a total
of 472 million barrels oil and 2.8 trillion cubic feet of natural
gas. Royal Dutch Shell (NYSE: RDS.A) has been a major player in the
state having drilled and produced from over 490 wells.
Players in Michigan include Devon Energy (NYSE:DVN), which has
amassed 240,000 net acres, and according to the company has 1.54
billion BOE in unrisked resources. The company recently signed a
$2.2 Billion Transaction with Sinopec International Petroleum
Exploration & Production Corporation (NYSE:SNP) to drill and
develop Devon’s asset base. Other players in Michigan include
Encana (NYSE:ECA) with 430,000 net acres, who drilled two
horizontal wells in 2011, Chesapeake Energy (NYSE: CHK) with
450,000 acres, and the recently acquired Atlas Energy, owned by
Chevron (NYSE:CVX), with over 380,000 net acres.
To receive further information about American Energy
Development Corp., telephone (855) OIL-AEDC or
email ir@aed-corp.com
About American Energy Development Corp.American
Energy Development Corp. is an independent US energy company,
committed to creating American energy independence through the
development of acreage in established oil and gas basins. Using the
latest geological, geophysical, and environmental technology, the
Company's goal is to locate, drill, and produce oil and gas in the
United States and secure regions. American Energy
Development's focus is on the development of Niagaran oil reefs in
Michigan and the underexplored onshore basins in the United
Kingdom.
Forward Looking StatementsThis press release contains
forward-looking statements (as defined in Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended) concerning future
events and the Company's growth and business strategy. Words such
as "expects," "will," "intends," "plans," "believes,"
"anticipates," "hopes," "estimates," and variations on such words
and similar expressions are intended to identify forward-looking
statements. Although the Company believes that the expectations
reflected in such forward-looking statements are reasonable, no
assurance can be given that such expectations will prove to have
been correct. These statements involve known and unknown risks and
are based upon a number of assumptions and estimates that are
inherently subject to significant uncertainties and contingencies,
many of which are beyond the control of the Company. Actual results
may differ materially from those expressed or implied by such
forward-looking statements. Factors that could cause actual results
to differ materially include, but are not limited to, risks
associated with drilling and production programs resulting from
geological, technical, drilling, seismic and other unforeseen
problems; unexpected results of exploration and development
drilling and related activities; continued availability of capital
and financing; increases in operating costs; risks associated with
oil and gas operations in general; availability of skilled
personnel; unpredictable weather conditions; and other factors
listed from time to time in the Company's filings with the
Securities and Exchange Commission. The Company expressly disclaims
any obligations or undertaking to release publicly any updates or
revisions to any forward-looking statements contained herein to
reflect any change in the Company's expectations with respect
thereto or any change in events, conditions or circumstances on
which any statement is based.
Cautionary Note to U.S. Investors - The United States Securities
and Exchange Commission permits oil and gas companies, in their
filings with the SEC, to disclose only reserves that comply with
the definitions presented at Rule 4-10(a) of Regulation S-X. We use
certain terms in this press release that the SEC's guidelines
strictly prohibit us from including in filings with the SEC.
Examples of such disclosures would be statements regarding
"probable," "possible," or "recoverable" "reserves" and "resources"
among others. U.S. Investors are urged to consider closely the
disclosure in our Annual Report on Form 10-K and Form S-1, File No.
333-169014, available from us at American Energy Development Corp.,
1230 Avenue of the Americas, 7th Floor, New York, NY 10020.
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