TULSA, Okla., May 30, 2013 /PRNewswire/ -- CAVU Resources, Inc. (OTC Pink: CAVR) today issued a Shareholder update to provide clarity on several recent corporate and operational developments.
CAVU reported that progress has been made at the Company's Chisholm Lease, despite severe weather conditions, flooding, and tightness in the availability of needed equipment. In spite of these delays, most of the reworking of the first three wells has been completed and it is expected that the remaining equipment will be delivered and installed by the end of this week.
"If the weather remains favorable, we expect to start pumping next week. Initially we were slowed down because we made the business decision to immediately upgrade these three wells into state of the art producers. This will save us considerably in the long term, and will eliminate possible revenue interruption that can come with old equipment. We have accomplished these upgrades on each well. Obviously, we suffered from several occurrences of terrible weather here in Oklahoma which further delayed us. It is important for our shareowners to recognize that once we begin pumping, it will bring revenue 24 hours a day, 7 days a week, even if we experience the same severe weather again. We have done things right, it has taken time, and there is no doubt that our original plans were indeed delayed, for the reasons I have just outlined. However, nothing has changed to the inherent value of our projects. Our Advisory Board continues to provide oversight, business direction and assistance with funding sources, and has helped place CAVU on a new path of growth and future prosperity. Nothing is more important to all of us than proper execution of what we say we are going to do, and demonstrating that to our shareholders. To that end we will provide a continuous stream of information on the results.
With the start up of the Chisholm lease we expect continuous production that exceeds our past results. Once we flip the switches, we will be keep shareholders updated with periodic production reports. Additionally, in the very near future we will complete the re-entry and preparation work on two more wells at Chisholm, as part of our ongoing plan to re-build production and revenues from this field," stated William Robinson, CAVU COO.
Additionally, CAVU announced that as part of Its upgrade, the Company will have 24/7 electronic controls and monitoring of all sensitive equipment on each well at the Chisholm Lease, the Barbee Lease in Nowata County and the Hogshooter Lease in Washington County. This state of the art system will be installed concurrent with the remaining installation tasks at the project. This will not only offer superior security for our assets, but minimize the environmental impact of equipment failure.
Management is pleased to report that Its subsidiary, CAVU Energy Services, Inc., has secured a development and management contract in Nowata, Oklahoma. Despite adverse weather conditions, nine of twelve wells have been reworked and are producing. This new relationship will bring in fee revenue and a carried interest in the project. Robinson stated, "We are gratified with the addition of this new contract and we are pursuing additional opportunities for revenue and a future stream of earnings that do not require the use of corporate funds."
CAVU is cancelling plans for a previously proposed spinout and listing of CAVU Energy Services, Inc. Louis Silver, CAVU's CEO, commented, "We have determined that it is in the best of our shareholders, to whom we have a fiduciary duty, that we stay in control of our future. Previously, CAVU has been disappointed by relying on outside parties to play key roles in executing the previous business plan. This will not happen going forward, short of a guarantee. Your new management team is highly focused on monetizing the Company's valuable assets. Going forward, our near term plan is produce oil and gas, generate revenue, and maximize profits. Eliminating unnecessary entities that compete for the focus of our management team and reducing the attendant complexity and confusion is the best course of action for us at this stage of our development."
Silver continued, "As our shareholders may have noted in our recent quarterly filings, we sent a demand and foreclosure letter to the management of Energy Revenue America, Inc. notifying them of our intent to take possession of the assets related to the Envirotek Fuel Systems, Inc. As of this date we have not received a proposal on curing the default. As this is now a legal matter, I have nothing further to say at this time, except that the notes were non-performing and therefore unproductive for us, and developing and managing the project ourselves is preferable. We will update shareholders as this issue progresses."
In a separate development, CAVU has engage a contractor to clean up the FILO Saltwater Waste Disposal Well #2 site to meet environmental standards and has completed an environmental and economic impact study. The results project that a 10,000 barrel per day disposal well is feasible. Based on the findings the Company is applying for a Kansas State Bond and Operators License. At the present time the Company is working to complete the offering for funding this project.
Finally, the Company has engaged a geologist and an engineering firm to complete a PV 10 Economic Study for the Hogshooter and Chisholm leases.
Silver stated, "To summarize, a lot has been achieved in our efforts to monetize our assets, rationalize our corporate structure, and to streamline and move revenue generating projects forward in the most effective manner. Billy has dealt with uncontrollable adversities in the operating area in an astute and cool manner. Though we are a bit behind our schedule for Chisholm, we have been able to move faster than expected in other areas. Rest assured that your management team is highly focused in two critical areas – 1) producing revenue and profits for CAVU, and 2) seeking and negotiating the best possible arrangements for growth capital to accelerate the development of CAVU's assets."
About CAVU Resources, Inc.
CAVU was formed with the goal of becoming a recognized regional player in the independent oil and natural gas industry by growing the company's oil and natural gas reserves. CAVU is a natural resource company engaged in the acquisition, exploration and development of oil and natural gas properties. The Company operates in the upstream segment of the oil and gas industry with planned activities including the drilling, completion and operation of oil and gas wells in Oklahoma, Texas, Kansas and Louisiana. CAVU's operating subsidiary, CAVU Energy Services, Inc., licensed Oil and Gas Operating Company manages the company's properties in Oklahoma with plans to operate targeted leases in Texas, Kansas and Louisiana. More information is available at the company's website at http://www.cavu-resources.com.
Cautionary note: This report contains forward-looking statements, particularly those regarding cash flow, capital expenditures and investment plans. Resource estimates, unless specifically noted, are considered speculative. By their nature, forward-looking statements involve risk and uncertainties because they relate to events and depend on factors that will or may occur in the future. Actual results may vary depending upon exploration activities, industry production, commodity demand and pricing, currency exchange rates, and, but not limited to, general economic factors. Cautionary Note to U.S. investors: The U.S. Securities and Exchange Commission specifically prohibits the use of certain terms, such as "reserves" unless such figures are based upon actual production or formation tests and can be shown to be economically and legally producible under existing economic and operating conditions.
CAVU Resources, Inc.
William Robinson, Chairman
Louis Silver, CEO
302 east 10th Street
Tulsa, OK 74120
SOURCE CAVU Resources, Inc.