Oil company set to tap new reserve

June 4, 2009 | Print this Page.
One company presses on with exploration.
Weak consumer demand has taken a toll on many in the oil and gas industry.

Today the Wall Street Journal is reporting the oil refiner Valero Energy is expecting a second quarter loss because of the lackluster demand.

Earlier in the year when the price of oil settled near $35 per barrel many oil and gas services companies had to forgo new investments because of the low price and weak demand. Oil is now hovering near $68 a barrel with MarketWatch reporting a Goldman Sachs estimate that oil prices will hit $85 by year end.

But one Colorado-based oil and gas exploration company is moving forward with a new project.

American Energy Resources announced plans to drill from a newly discovered secondary oil reserve in Lane County, Kansas. The well is known as Doyle's Dome #7 and is expected to produce over 200 barrels a day and remain active for 25 years or longer.

"This is the second largest well American Energy Resources has ever drilled," said Don Allen, president and founder of American Energy Resources. "Our use of 3-D seismic mapping technology allows the company to hit 'sweet spots' with multiple pay zones."

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