sai Development Production & Acquisition

AEC Oil Company (AEC)

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​​AEC 

AEC Oil Company (AEC) is an Oil Company organized and incorporated in the State of Texas. AEC's highly experienced Team of Oil Industry Professionals have over 100 years of Executive, Management, Technical, Drilling and on the job Field Experience.  


The early Operators only captured 10% to 15% of the Oil in place in the old Oil Wells. There is 85% to 90% of the Oil in place still to be exploited in most older Texas Oil Fields. Radio Metrics, 3D Seismic, with independent Geologist mapping and Geophysicist interpretation, new drilling and completions methods have created more Oil booms to capture the Oil in place in these old Oil Fields and explore the deeper horizons without heave fracking.


Opportunities abound in the Oil Industry. The historical prices of WTI BO was $2.50 BO from 1961 to 1973 then increased to $10.00 BO 1973 to 1975. Oil prices continued to increase to $40.00 BO in 1979 then decreased  to $20.00 BO by 1987. The price of BO decreased to $8.00 BO November 1987, which cause several Oil Companies to sell their Oil & Gas Leases and wells to those with deep pockets. The price of Oil then increased to $20.00 BO to $25.00 BO through 2003. Oil prices then increased to $40 BO in 2004 and continued to increase to $150.00 BO in 2007 and several large Independent OTC Companies were made. Oil prices then decreased to $30.00 BO in 2009 and increased to $100.00 BO through 2014. Oil then decreased to $29.00 BO in 2015 and is currently $73.44 BO with estimations of $75.00 BO, September 28, 2018. Oil prices change based on the International Markets, which are subject to; increase or decrease at any time. 


AEC's Management's aggressive plans are to take advantage of AEC's opportunities, the current low development cost and increasing Oil prices to establish AEC as a successful OTC Nasdaq Capital Markets Company without debt, paying cash dividends, maximizing Shareholders value.


AEC, Management has entered into a PSA to purchase Production May 8, 2019. 


AEC's Management requested an operational loan in the Amount of $15MM, June 15, 2019, AEC's Management assumes will close and fund on or before July 15, 2019. AEC's Management further plans to issue AEC's Private Placement Memorandum to Accredited Investors to raise up to $250MM Maximum, following SEC Regulation 505 and 506.


Executive Summary 

May 29, 2019


The AEC Project is 3 producing Oil Wells and 1,000+ acres 100% WI, 75% NRI leases, which off-sets producing Oil Wells where Oil has been developed, with many current producing wells. AEC's Archer County Project is buying producing wells with several PUD drilling locations. AEC's initial Project off-set Oil Wells with infill drilling locations, with Pinnacle Reef formations to explore with 3D Seismic. Management plans to engage one certain Seismic Company and a highly qualified  Dr. Geophysicist to interpret the 3D Seismic. Values at Industries Standard 5X value of off-set Oil Wells at 40 acres spacing, of AEC's planned 1000+ acres leases @$1,725,000.00 for (1) Oil Well. Plans are to develop 30 Oil Wells. Three Oil Wells are currently, with two of the three to be reworked by Seller in the first 20+- days. An exciting and significant geological discovery of the Pinnacle Reef Formation, to be identified by 3D Seismic with interpretation is one or more probable drilling locations of a Pinnacle Reef Oil Well or Oil Wells. History of Pinnacle Reef Oil Wells in the Archer County Area shows us the Pinnacle Reef Oil Wells have produced 300,000+- BO, with 100BOPD to 200BOPD. Industry Standards of 5X values for 33 shallower Oil Wells producing 30BOPD, based on net cash flow @$1,725,000.00 for (1) Oil Well, calculates to $56,925,000.00 producing Oil Wells when developed. AEC's cost is for the producing Oil Wells, the lease bonus, the 3D Seismic, interpretation and other proprietary information by the highly qualified Dr. Geophysicist, once he is engaged. The highly qualified Professional Geologist, Brad Massey, has studied, researched and mapped the area and Pinnacle Reef Formations and AEC's Project for over 30 years. His report and plans or available.


AEC's Management engaged Mr. J.L. Edwards, BS, MS. Petroleum Engineering Services, who issued his Evaluation Report of Acreage position Hydrocarbon Reserves Potential for C. Bollinger Svy. Sec. 43, A-14 Archer County, Texas, from information from the Steen #1S (API #42-009-416630 Dual Induction Focused Gamma Ray Log and Compensated Density/Compensated Neutron Gama Ray-Micro Log) of said well drilled on the above captioned acreage that penetrated both Caddo Lime and the Marble Falls Lime in said well bore in addition to regional open source geological and production data specifically of the Caddo and Marble Falls formation intervals. Total Estimated Recoverable 103,178 bbls per 40 acres spacing. Management  calculates and assumes 28 Archer County Oil Wells would be 2,888,984 Estimated Recoverable Barrels of Oil @$50.00 BO would be $144,449,200.00 less cost of development and operations.


AEC's Project is located in the Central Texas Oil & Gas Country. The 3 producing Oil Wells are located in Archer, Jack and Parker Counties, with one well and the 1,000+- mineral acres off-set lease acres   located in Archer County, that was known as the largest producing County in Texas. The Pipeline infrastructure and the end user/Oil & Gas Buyer is in place. The terms of the lease are to be negotiated and assumed to be 3 years, with one producing well  holding the lease (held by production) (HBP). The RRC of Texas rules are 40 acres spacing  per sallower Oil Well. AEC entered into a PSA  to acquire the 3 producing  Oil Wells May 8, 2019, by issuing 10MM Common Shares of AEC Stock @$1.00 a share for the transaction, with a cash payment of $850,000.00, which includes reworking two of the Oil Wells. Closing is schedules on or about July 1,  2019. The Professional Geologist has issued his report and AFE for the Wells testing 6,000 feet. Plans are to run 3D Seismic and for the highly qualified Dr. Geophysicist to interpret the 3D Seismic and issue his report of the lease formations the Geologist and Management believes will identify many shallower drilling locations and one or more Pinnacle Reef drilling locations. The Geologist projections are based on information he has complied from his years of OJT work studding, researching and mapping the Area, his professional study of the lease,  off-set proven producing wells and developing the Steen #1S Oil Well.


Management's Professional Team estimates AEC monthly operation cost is $5,000.00 per producing Oil Well, with 30BOPD initial production (IP) per vertical shallower Oil Well. History shows us by reviewing off-set developed wells in the Shallower Formations their is minimal decline for years, settling to 20BOPD for years and salt waist water to dispose, with large Hydrocarbon Reserves. The probable Pinnacle Reef  Deeper Oil Wells are to produce 100BOPD to 200BOPD. Plans are to continue leasing mineral acres off-set to the 1,000+- proposed lease acreage, run additional 3D Seismic , with DR. Geophysicist interpretation, at  his discretion, to develop additional shallower Oil Wells and probable Pinnacle Reef Wells. The AFE is 6,000' TD, which includes the Mississippian Pinnacle Reef Formation.  The AFE cost is $706,000.00, with contingencies to $800,000.00. AEC's Team assumes it is probable to develop 100s of shallower Oil Wells on 40 acres spacing and one or more Pinnacle Reef Wells on AEC's planned 1,000+- acres off-set leases and 1,000s of available mineral acres to lease. 


AEC's Management plans to engage the Dr. Geophysicist to interpret the 3D Seismic data who has had positions with Major Oil Companies for over 30 years, working world wide and being with Mobil Oil Company for 16 years .  He interpreted Mobil's 3D Seismic for over 10 years, while discovering several Oil & Gas prospects, drilling many Oil & Gas Wells and heading operations. His specialty is Texas. He retired from Mobil and established his independent LLC., his operations of  interpreting 3D Seismic for others and identifying drilling locations. He has published several publications, Professional Memberships and references from highly qualified individuals.


AEC plans to acquire the leases and Management's plans are for AEC's Chief of Field Operations and Team of Professional to aggressively develop the 1,000+- leases by exploiting the off-set, infill PUD drilling locations initially than continue to exploit all leases acquired as directed by the Dr. Geophysicist. Plans are to develop 30 high gravity shallower Oil Wells and one or more Pinnacle Reef wells the first  twelve months. Develop 96 shallower Oil Wells the 2nd year and 96 shallower Oil Wells the 3 rd year, and all Pinnacle Reef Wells identified. It is assumed the total Oil Wells Hydrocarbon Reserves will have 5X values in the $Billions @$50.00 BO. 


AEC's CEO plans  to register 10MM Shares of AEC's Common Stock in July 2019. Plans are for AEC Investment Specialist to engage an Investment Banking Firm to underwrite AEC IPO. It is assumed AEC's Common Registered Stock would be offered @$10.00 to $25.00 a share at the IPO effective date and the AEC would file to list on the NASDAQ  or the NYSE. The Basis for AEC IPO would be the year end gross and net revenue 17 of from 33 producing shallower Oil Wells. Plans are to engage Netherland Sewell Engineers NASI and Weaver Accounting Firm to Audit AEC Financial.  


EXECUTIVE SUMMARY
May 29,  2019

AEC Oil Company (AEC) is a Texas Corporation, doing business in the Oil & Gas Industry. AEC’s team of professionals have over 100 years of experience, in executive management, geophysics, geology, engineering, mineral lease acquisitions and on the Job oil field operations. AEC’s Chief of Field Operations is a highly qualified Geologist with over 30 years’ experience, has previously operated large development and production operations.

The AEC Project is 11,000+ acres 100%WI, 75% NRI lease, which off-sets a Gas Field where several Deep Gas & Oil Wells were developed, with the majority currently producing. It is the same; as buying producing wells with several PUD drilling locations,. AEC's initial project is 18 high graded infill off-set drilling locations, valued at the Industry Standard 5X value of $400MM+-. AEC's cost is only for the lease bonus, 3D seismic and the professional 3D seismic interpretation and other proprietary info by a highly qualified Dr. Geophysicist, not $400MM+- that would include several depleted wells and step-out drilling locations for a production deal.  


AEC's Project is located in the South Texas Oil & Gas Country, where the Major’s play. The pipeline infrastructure and the end user/gas buyer (Kinder Morgan) is in place. The terms of the lease are for 3 years. One Well holds 640 acres, held by production, (HBP). 17 Wells holds the 11,000+ acres HBP. RRC of Texas rules are 160/320 acres spacing per deep Well and the RRC of Texas rules are 40 acres spacing for all shallow wells compartmentalized and stacked pay zones. AEC Oil Company entered into a PSA to acquire the lease April 19, 2018, with AEC buying 2700+ acres of the lease by issuing 12MM shares of AEC Oil Company Common Stock and cash initially. To acquire the balance, as well, when paid in-full, within 13 months. Andover Energy Corporation (AEC) plans to assume the PSA and pay the lease bonus.


The highly qualified Professional Dr. Geophysicist, has issued his report of the lease formations, he states is an incomplete development of the fault and AEC's 11,000+ acres lease for infill development of offset drilling locations to exploit. His projections are based on information he has compiled from his 3D seismic interpretations and his professional study of the lease, and 40+- off-set proven producing wells and highly productive Fields with many wells near the lease.

Dr. Geophysicist estimates monthly operation is $27,114+- with 400+-BOEPD per good deep well. History shows by reviewing off-set developed deep wells in the formation there is no decline for 3+- years and very little salt water to dispose, with large Oil & Gas Hydrocarbon Reserves. The deep flowing Gas Wells are choked back, as stated by the Engineer who developed the off-set wells and who AEC’s Chief of Field Operations plans to engage to engineer AEC off-set drilling locations, into Producing Wells. A good off-set Well reviewed by Dr. Geophysicist has produced 3.2BCF and 97,000BC. Many of the wells reviewed and studied by the Dr. Geophysicist have produced for several years at equally high volumes. Kinder Morgan’s Representative stated to AEC’s CEO that Kinder Morgan would buy all Gas AEC finds in the County and will assist and contract to buy AEC’s Gas. AEC’s first yearend gross revenue is assumed to be $48MM+- @$50.00 BO from 75 of 91 off-set infill producing wells based on AEC assumed yearend accumulated Gas, Condensate and NGLs yearend gross production.

AEC assumes it is possible to develop 50 to 70 deep wells at 160 to 320 acres spacing and up to 500 shallow Oil Wells at 40 acres spacing on the lease, with the 3D seismic signature of stacked compartmentalized formations from 1500’ to 7100’ shallow and 7100’ to 11000’ high pressure proven with deeper formations to explore from the 3D seismic interpretation to include possible unconventional development.

A potentially exciting and significant play was identified by the Dr. Geophysicist within the western central portion of the 3D seismic lease area. A mappable, 2200 acres debris flow, several hundred feet thick, encased in shale which is found with the same signature and same age as Marathon’s Brae Field in the North Sea reported to have produced 200MMBO from 24 Wells.  Dr. Geophysicist is familiar with the Brae Field and has identified 30 wells locations in the debris flow. He has also high graded over 18 deep good off-set Gas Wells drilling locations on the 2,700+ acres southern part of AEC’s lease. AEC’s Management Estimates the 5x value of 18 infill drilling locations calculates to $400+-MM @$50.00BO. An Oil & Gas Professional of OxEnegy, has issued his AFE for $1.8MM+- per deep vertical flowing well. His additional AFE for each shallow Oil Well would cost $700,000.00+- average per well and It is assumed each shallow well would produce 150BOPD+-. AEC’s CEO signed and Engagement Agreement with Netherland Sewell Engineering Firm (NSAI) to engineer AEC 11,000+ acres South Texas lease, with 18 to 24 PUDs September 18, 2018. Additionally, NSAI will continue their engineering for AEC’s entire lease and AEC’s future producing wells.


AEC's Rig Specialist is negotiating for drilling rigs and a well maintained operating Service Company and Work Over Company, which will, when successfully acquired, continue its operations and service and complete AEC's Oil & Gas wells, as well.

Dr. Geophysicist has had positions with Major Oil Companies for 30 years, working world wide and being with Mobil Oil Company for 16 years. He interpreted 3D Seismic for Mobil OIL Company and headed several of Mobil Oil Company’s operations interpreted the 3D seismic for more than 10 years while discovering several Oil & Gas fields and drilling many Oil & Gas Wells. His specialty is South & West Texas including the Permian Basin. He established an Independent LLC, his operation of interpreting and identifying drilling locations by interpreting 3D Seismic for others. He has interpreted AEC’s 11,000+ acres lease Project and has discovered both deep and shallow infill drilling locations to exploit on AEC’s Oil & Gas Project. He conducted his research of off-set producing wells. He has high graded over 18 infill drilling locations on the southern part of AEC’s South Texas mineral lease. He states the 11,000+- lease is an incomplete development of the Fault System and AEC’s lease for AEC to exploit. He further states that AEC’s drilling locations are exploitation not exploration, with like 3D seismic signatures, as the good off-set wells. He further states he has identified hundreds of shallow Oil Well drilling locations and over 50 deep gas, with high gravity Condensate and NGLs drilling locations. The lease lies between a shallow Oil Field on the north that has produced 75MM BO and the off-set Deep Gas & Oil Field on the South, which all are located in the Texas Oil Country that has produced 1.12B BO and 6T cubic feet of gas reported through 1994 and continues to produce.

AEC’s Management’s plans or for AEC’s Chief of Field Operations and Professionals to aggressively develop AEC 11,000+ acres lease Project by exploiting the off-set infill drilling locations initially then continue to exploit the entire lease as Dr. Geophysicist directs. Plans are to develop 91 deep high BTU gas with high gravity Condensate, NGL Wells and CT Wells the first year, 96 deep Gas Wells the 2nd year and the equivalent of 96 deep Gas Wells the 3rd year being shallow Oil & Gas Wells equivalent, together with the CT Wells, that are projected to have $12+- Billion estimated 5x values of 471 Wells. AEC’s 3 yearend Market Cap is assumed to be $26B+-, @$50.00 BO, with AEC listed on the Nasdaq Capital Markets trading OTC with no debt, paying cash dividends quarterly maximizing Stockholders value.

AEC’s CEO plans to register certain shares of AEC’s Common Stock, as a AEC's IPO, which would be underwritten by one certain Investment Banking Firm and/or underwritten and sold online by AEC, with a yearend effective date, subject to; the SEC comments, and list on the Nasdaq Captial Markers, based on AEC 1st yearend Revenue and Earnings from 91 developed Deep Producing Wells, with gross revenue from 75 Wells engineered by Netherland Sewell Engineers (NSAI) and AEC Audited by Weaver Auditing Firm of Fort Worth, Texas.


AEC's exit strategy is to take AEC to the Pblic Markets by a registered S-1 IPO, and file to list on the NASDAQ Capital Markets a the IPO effective date, or to enter an agreement with a NYSE listed Company that  AEC's Management is negotiating with, which needs it's Stock stimulated and cash. Plans or for the NYSE Company to Spin-off AEC as a NYSE Company, by AEC issuing the NYSE Company 10% of AEC's Common Stock. The NYSE Company would then issue the AEC Common Stock to its Stockholders as a dividend. That would stimulate the NYSE Company's Stock. AEC would buy certain equipment from the NYSE Company for cash, which the NYSE Company needs.


AEC's Management's exit strategy is to sell certain share of AEC's Common Stock to the Public, raise several $100Million and pay-off all debt within three (3) years. 


Signed this 29th day of May 2019.

AEC Oil Company (AEC)
s/BOB ROYAL/s
Bob Royal, President
Chairman CEO
3601 West Point Drive
Amarillo, Texas 79121
214-546-4520
robert@aecoil.com
www.aecoil.com