Looking to tap into stranded natural gas in the state of Kentucky, Australian-Canadian Oil Royalties Ltd. (ACOR) said it has signed a general pooling agreement on the Park City Gas Field in Kentucky and also plans to construct a low-pressure gas gathering system to get gas from the project to market.
The pooling agreement gives ACOR a 22% working interest in the pool under approximately 38 shut-in gas wells. ACOR entered into an agreement with Resource and Energy Technologies Co. for the drilling and development of oil and gas in the Park City Field prospect in Edmonson County, KY. This field is located in the Highland Rim Physiographic Province, which extends over portions of central Kentucky and Tennessee. As of April 5, 2004, a total of more 38 wells have been drilled and paid for. ACOR has paid its drilling costs with restricted common stock based on a value of $1.00 per share.
Because of the lack of gas gathering pipelines in the area, it has taken ACOR five years to get the project to this point. The company noted that this part of western Kentucky contains significant shallow gas reserves from several different formations, including the Ft. Payne Limestone, New Albany Shale and Silurian/Devonian carbonates.
Atmos Pipeline and Storage LLC has executed agreements with the developing companies to construct the gas gathering system. The Park City gathering system initially will gather natural gas from the 38 shut-in gas wells. The gas will be processed, compressed and delivered to Texas Gas Transmission’s pipeline east of Bowling Green, KY, for redelivery to consumers in the Atmos gas system.
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