U.S. Energy Corp. (USEG) issued an update on its operations in south Texas, where the company is developing the Eagle Ford Shale on its leasehold. The company is involved with Crimson Exploration (CXPO) in this area.
U.S. Energy Corp. reported that the KM Ranch #1 well is currently undergoing completion operations and results will be released shortly. The company owns a 30% working interest in this Eagle Ford Shale well, which is located on the Leona River lease in Zavala County.
U.S. Energy Corp. also announced that the company has signed a second participation agreement with Crimson Exploration to purchase an interest in leasehold in the Eagle Ford Shale. The leases covered by the agreement are located in Zavala and Dimmit Counties, Texas.
U.S. Energy Corp. will purchase a 30% working interest from Crimson Exploration in 7,186 gross acres. The leases are all currently held by production and produce 200 gross barrels of oil equivalent per day from the Austin Chalk formation. The company estimates that the leases contain 44 gross drilling locations, and plans to spud the first horizontal well into the Eagle Ford Shale in October 2011.