Underground Energy is focused on identifying, acquiring rights to, exploring for, developing and producing oil reserves from shale formations in North America using the latest exploration and recovery techniques and technologies. The Company initially acquired a 100% working interest in three leases covering 5,850 acres at Asphaltea in Santa Barbara County, California. Underground has identified two highly fractured conventional (anticline) structures as core prospects targeting the Monterey Shale in the Santa Maria Basin.
Underground Energy Corp. (Underground Energy) is a British Virgin Island holding company that owns Underground Energy, Inc., a Delaware corporation that is an exploration and production company focused on unlocking oil from shale plays, principally in the Western US. Underground Energy is traded on the TSX Venture Exchange under the trading symbol "UGE" and is quoted on the OTCQX International trading platform under the symbol "UGGYF." The Company has raised a total of approximately $36.5 million in operating capital to date.
Underground Energy has identified two potential conventional structures as its core prospects, targeting the highly fractured Monterey Shale at its Zaca and Asphaltea assets.
In addition, Underground has also assembled a strong land position in Nevada designed to target the emerging shale oil potential of the region. The Company believes that acquiring land ahead of the curve could support a low cost entry into multiple emerging resource plays and to date has acquired 27,446 net acres spanning six sites.
In November 2011, the Company completed an agreement to acquire assets including 39,778 gross acres (29,854 net), three producing wells (two oil wells and one gas well, with total production of approximately 50 boepd), a number of drill ready locations and multiple exploitation and exploration prospects in two trends in the Santa Maria Basin and four trends in the San Joaquin Basin for total consideration of US$5.5 million (comprising $4.6 million in cash and $0.9 million in assumed liabilities). In line with the Company’s aggregation strategy, the acquired lands are primarily prospective for Monterey and other analogous oil-prone shale plays. Underground is the operator at each of its acquired properties and the Company has commenced drilling in late February 2012. The drilling plan includes low-risk, step out drilling from the existing Zaca oil field which as produced in excess of 32 million barrels of oil to date.