‘Cardinal investors take advantage of intangible drilling cost tax deductions’
Dublin OH, March 12, 2015 — Cardinal Energy Group, Inc. (OTCQB: CEGX) is taking advantage of the accelerated tax deductions for oil & gas investors through its Direct Participation Programs. While investors question energy investing overall, Cardinal is attracting them with its first such program called the Bradford Joint Venture. The Bradford Joint Venture offered a unique opportunity for accredited investors to directly participate as joint venture partners in a twenty-one (21) well oil drilling program, located in Shackelford County, Texas.
Cardinal engaged Pinnacle Energy Services, LLC, a professional engineering company, to perform a reserve analysis on the Bradford A & B Leases. Utilizing current market metrics of $50.00 per barrel of oil applied to the Reserve report and based on the current economic conditions, the $2,500,000 Bradford Joint Venture is currently worth $4,080,897, this translates into an immediate increase in value of almost 40%.
Timothy Crawford, CEO of Cardinal comments. “Cardinal purchased the Bradford A and B lease to develop a drilling program for investors to realize significant tax savings against their regular income. The joint venture partner receives a substantial tax deduction in the first year which can be deducted against ordinary income. A unit investment of $25,000.00 increased in value in less than one year to $40,000.00 per the formula derived from Cardinal’s recent reserve report on the Bradford lease. If you are in the highest tax bracket you would have an $8,000.00 accelerated tax deduction for every $25,000.00 joint venture unit owned. The reserve report indicates that at today’s oil pricing of approximately $50.00 per barrel, a unit’s distribution from its production income would approximately double your money when including the intangible drilling cost tax deductions.”
Mr. Crawford comments further, “A water-flood program is planned for the Bradford A & B Lease. The Reserve Report does not take into account any additional production that may be derived from the water-flood plan.”
About the Tannehill Sandstone
According to a 1956 Geological report on the AAPG Data pages web site by James E. Russell regarding the Tannehill Petroleum Company Newell Waterflood Project Shackelford County, Texas, the Abstract states: Waterflooding the Tannehill sandstone underlying the Newell Lease in Shackelford County, Texas, can be considered a success. Pilot operations were commenced in May, 1952 by the Tannehill Petroleum Company. Performance of the Pilot Flood was encouraging and a decision to proceed with full-scale development was made early in 1954. By the end of 1956 the project had been extended to cover 393 acres and presently includes productive acreage on the Newell, Moberly and Jeter Leases. Production was increased as a result of water injection from 20 barrels per day to a peak rate of 498 barrels per day or 25 times the rate under primary operations.