Titan Energy to acquire ownership stake in Illinois oil project

Australian oil and gas company Titan Energy Energy has inked an agreement to earn up to an 81% interest in a ready-to-drill hydrocarbon producing prospect in Illinois, the US.

The company will pay $96,000 in lease fees to Pharis Petroleum Corporation for the 160 acre Franklin Prospect project.

Titan Energy will earn the stake by paying 96% of the estimated drilling costs of $225,750 up to the point where production casing is run and cemented.

Titan Energy managing director Stephen Thomas said one of the things that attracted the company to this asset is the shallow targets that are available.

"Additionally, the area has a good record as a consistent, hydrocarbon producer," Thomas said.

"This acquisition, along with our recently announced agreement to acquire an interest in the high impact Allen Dome project in Texas, is a good example of the capabilities that Titan has to acquire quality, international assets to support our Australian projects."

Once the acquisition is completed, Titan Energy will become operator of the Franklin Prospect project.

The company has already contracted Illiana Energy to drill its initial vertical exploration well in the lease area to a depth of 3150 feet in the second quarter of 2012.

Titan plans to complete drilling in the Aux Vases and McClosky zones for a conventional test of the Midyett South Aux Vases sandstone oil reservoir at the western end of the Dale/Thompsonville Oil Field Complex.

The Franklin Prospect project is located in the Midyett South Development Project in Franklin County, Illinois, which is based within the Illinois petroleum structural basin, comprised of southern Illinois, south western Indiana, and western Kentucky.

The basin has produced an estimated 4.5 billion barrels of crude oil from Paleozoic reservoirs.