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SAVOY ENERGY CORP Files SEC form 8-K, Entry into a Material Definitive Agreement (EDGAR Online) Savoy Energy Corp. Reduces Debt and Obtains Initial Funding From New Sources (Marketwire) SAVOY ENERGY CORP Financials (EDGAR Online Financials) SAVOY ENERGY CORP Files SEC form 10-K/A, Annual Report (EDGAR Online) SAVOY ENERGY CORP Files SEC form 8-K, Entry into a Material Definitive Agreement (EDGAR Online) SAVOY ENERGY CORP Files SEC form 10-Q/A, Quarterly Report (EDGAR Online) SAVOY ENERGY CORP Files SEC form 8-K, Non-Reliance on Previous Financials, Audits or Interim Review (EDGAR Online) Skymark Research Initiates Independent Research Coverage on Savoy Energy Corp. (GlobeNewswire) Trading Outlook for Savoy Energy Corp. Issued by InvestorSoup.com (GlobeNewswire) SmallCapSentinel.com: Report on Oil and Gas Released (GlobeNewswire)
Savoy Energy Corp. – SNVP
June 8, 2009 · Filed Under Company Profiles
Savoy Energy Corporation (SNVP) is an independent oil and gas company building a diversified portfolio of valuable oil and gas assets in the United States. The company is focused on identifying abandoned oil and gas assets, which are then brought online through recompletion and work-over activities, a meticulous process of evaluation, application of modern well technology, and stringent management controls. This process allows the company to increase its asset base and cash flow, while significantly reducing the cost of initial drilling, and takes away the risk of traditional exploration projects. Savoy Energy’s financial structure allows it to minimize the high overhead of traditional E&P companies.
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Company Website: www.savoyenergycorp.com
INVESTMENT HIGHLIGHTS
- Savoy sells oil that is drilled domestically, providing a cost-efficient and convenient product supply for large oil companies who distribute nationally.
- Savoy is in the process of performing recompletion and workover activities on wells in Texas.
- They re-enter and bring back into production wells that have been previously drilled and subsequently abandoned for a variety of reasons. Wells they pursue were drilled and abandoned by large oil companies because of uneconomical production rates.
- Due to high overhead costs and other opportunity costs, large oil companies may require a well to produce between 500 and 800 Barrels Per Day (“BPD”) in order to be economically viable. Their significantly lower overhead allows them to profitably extract oil from wells at a rate as low as 0.5 BPD.
- They seek wells that were drilled by companies searching for natural gas but instead found oil. These gas companies abandoned these wells and moved on in their search for natural gas. These capped wells present an opportunity for Savoy to reenter using recompletion and workover techniques and equipment to extract the oil, and finally sell the extracted oil to oil brokers who in turn sell the oil to large oil companies.
- Savoy has retained Forrest A. Garb & Associates, a petroleum consulting firm specializing in geological analyses of oil wells, as an independent contractor. Forrest evaluates abandoned wells and provides seismic and geological analyses of the wells, and counsel’s Savoy in their decisions regarding which wells they should pursue.
- Savoy currently holds leases, as well as title and right-of-way access, on four wells in Texas, all of which are currently producing crude oil. These wells are referred to as: Ali-O No.1, Rozella Kifer, Zavadil No.1, and Wright.
- Savoy has also identified 18 other wells, two that are producing and 16 that have been shut in but have seismic or other data indicating that they are favorable candidates for recompletion and workover. They hope to acquire these potential assets in the next twelve months.
- Savoy presently uses a contract operator, Maranatha, to conduct field operations. This allows them to pursue their business plan without the overhead costs of employees, and the logistical concerns of scheduling, insurance, and human resources. They pay Maranatha a monthly fee of $500 for each well they service, and they conduct all of the field operations associated with their wells, including drilling, pumping, and transporting to their customers. The agreement with Maranatha is verbal and continues on a month-to-month basis.
- Savoy sells all of the oil they produce to Gulfmark Energy, an oil broker who in turn sells oil to Royal Dutch Shell, one of the world’s largest oil companies. The price at which they purchase their oil is based upon the previous month’s open market crude oil prices, and is reset monthly accordingly. Thus, while they are susceptible to large trends in crude oil prices, they are not vulnerable to daily fluctuations.
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