ReoStar Energy Corp. (OTCBB: REOS) operates as an oil and gas company in the development and redevelopment of oil and gas fields in the continental United States. Their focus is on generating revenue and profits from their oil and gas properties, and building reserves through the acquisition of strategic leasehold interests. Their proven reserves are worth approximately $180 million, and they hold over 17,000 acres of mineral leasehold in Texas and Arkansas, including operational equipment and service and drilling rigs.
ReoStar relies on a business model that allows them to be productive in their current operations and provides them with the ability to seek out new and underdeveloped oil and gas fields. The company uses an integration of assets to assimilate drilling equipment, mineral leaseholds and operational experience into a seamless, efficient and low-cost operator-producer platform. Acquiring new or already existing gas resources is a main focus of the company, but just as important is the continuation of their current operations. Their application of EOR Technology (Enhanced Oil Recovery) stimulates oil and gas flow to produce remaining fluids that were not previously extracted from mature oil fields during primary or secondary recovery.
The company’s most challenging project is the Corsicana field, which was the first Texas oil field to produce oil and gas in commercial quantities. From 1896 and January 1, 1993, the field produced nearly 44 million barrels of oil. The Corsicana leasehold is one of the best redevelopment opportunities in Texas, as it contains a tremendous amount of in-place reserves.
The Fayetteville Shale is located in north central Arkansas and is the company’s unconventional gas reservoir. Covering more than 5,000 square miles, the depth of the shale varies because of folding of the strata, but is most often somewhere between 1,500 and 6,500 feet deep. As the industry continues to gain experience with drilling and working more closely with the Fayetteville Shale, it shows great potential to be one of the leading future gas producers for the United States. Production levels have shown improvement, proving the economic viability of the field.
Barnett Shale covers approximately 6,000 square miles and as many as 21 counties, and has emerged as one of the largest and most active gas fields in North America. It produces more than one-half of the shale gas produced in the United States. Management has estimated that the field will produce more than 500 billion cubic feet of gas this year, placing it in the top three U.S. fields along with Prudhoe Bay in Alaska and the San Juan Basin in New Mexico.
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