Chancellor Group buys B&L's Shinkle oil field

Chancellor Group Inc., Las Vegas, Nev., has completed its purchase of B&L Co.'s Shinkle oil field in Greenwood County, Kan., for $1.75 million in cash and stock.

Chancellor said the field has 5 million bbl of proved reserves of sweet, 23˚-gravity oil. It said ultimate reserves could as high as 20 million bbl.

The company will have a 100% working interest and an 87% net revenue interest.

Shane Rodgers, Chancellor vice-chairman, said the company will spend $300,000, including $50,000 for remedial work to reopen seven existing wells and $200,000 to drill the first three of 20 infill wells.

Each infill well will take about 10 days to drill, cost $75,000, and will produce 100-150 b/d. Chancellor said it could recoup its investments within 6 weeks.

Also, it predicted gas production of at 500 Mcfd/well. It noted that two of the existing wells have flowed 2 MMcfd.

And Chancellor said, "Additional potential might be contained in the abundant coal seams encountered in the older wells, which could provide an excellent chance for production of coal bed methane gas." It plans to test that potential with two wells this spring and a seismic survey in the summer.