Galilee has a Joint Venture Agreement (“JVA”) with a group of private investors to progressively earn up to a 75% working interest (WI) in selected areas within 110,000 acres of leases in the Anadarko Basin, south-western Kansas.
In 2014 Galilee commissioned a ~ 40 square mile 3D seismic survey over the eastern portion of the AMI which was completed in December 2014. The resultant data is excellent, and work has continued with a number of exciting prospects being matured.
This significant operated position in a lightly explored area within a highly contiguous lease position is exciting. Wells within the AMI have recovered oil and gas from multiple zones demonstrating hydrocarbon charge and reservoir quality.
The key reservoir targets are shallow (4,000-6,000 ft) limestones and sandstones in the Carboniferous section, primarily in the Missourian Lansing and Kansas City groups. The reservoirs are generally from 5 to 40 feet thick and often have more than 20% porosity. Secondary objectives exist in the slightly deeper Cherokee Group, Marmaton Group, Morrow Sandstone and Mississippi Lime.
The use of high resolution 3D seismic data, which can resolve the small and subtle structural and stratigraphic anomalies as well as small faults, has resulted in an increase in exploration drilling success rates to over 65%. Importantly, any success is expected to deliver strong economic returns with the dry hole costs for these wells being ~ $300,000.
The AMI area is typical of the areas targeted by operators in other parts of Kansas. It is only lightly explored yet surrounded by prolific historical oil and gas production. Production to date from Meade County and the five adjacent counties is in excess of 185 million barrels of oil and 5.5 trillion cubic feet of gas, with producing fields located one mile to the east and within 10 miles to the south and west.