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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): DECEMBER 19, 2000
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UNITED HERITAGE CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
UTAH
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(State or Other Jurisdiction of Incorporation)
0-9997 87-0372826
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(Commission File Number) (IRS Employer Identification Number)
2 CADDO STREET, CLEBURNE, TEXAS 76031
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(Address of Principal Executive Offices) (Zip Code)
(817) 641-3681
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 9. REGULATION FD DISCLOSURE
On December 19, 2000, the Registrant is issuing the press release
reproduced below:
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FOR IMMEDIATE RELEASE:
UNITED HERITAGE CORPORATION OPERATION UPDATE
Highlights New Mexico Initial Drilling Successes
(Four Infill Wells Drilled, Fifth Well Underway)
Cleburne, TX - December 19, 2000: United Heritage Corporation (NASDAQ: UHCP) is
an independent oil and gas exploration and development company with four
leasehold properties totaling 30,500 acres that are estimated to contain in
excess of 265 million barrels of oil-in-place. The Company's property in the Val
Verde Basin of southwest Texas has an estimated 168,000,000 barrels of oil-in
place of which, currently, an estimated 24.5 million barrels have been
classified as "proven undeveloped reserves" and 912,666 barrels have been
classified "proved developed reserves". The Company's New Mexico fields have an
estimated 97 million barrels of oil-in-place. United Heritage Corporation also
purveys a line of specialized premium meat products under the brand name
Heritage LIFESTYLE Products-TM-, which are marketed through several regional
supermarket chains and over the Internet at (WWW.INTERNETBEEF.COM).
Chairman of the Board and Chief Executive Officer Walter G. Mize stated, "I
think that we have some exciting developments that should be of interest to
investors . . . four infill wells already drilled; one infill well being drilled
now; two wells already reworked; four wells being scheduled for rework; two
wells already recompleted; four wells being scheduled for recompletion; and four
truck mounted and one tractor mounted swabbing units working in the fields."
UHC NEW MEXICO CORPORATION
IN EXCESS OF 20,000 ACRES IN CHAVES AND ROOSEVELT COUNTIES, NEW MEXICO
United Heritage Corporation management is currently giving the majority of its
attention to its New Mexico oil and gas properties and their development. These
properties were acquired in 1999. Overall the fields were in poor condition. The
company has made a variety of improvements to the fields and facilities in its
New Mexico properties, including road work, flow lines, tank batteries,
heater-treaters, and disposal wells. "We anticipate continuing our leasehold
improvement efforts in our New Mexico field," said Chairman Mize, "for quite
some time, since only a small percentage of necessary work has been completed to
date."
Current gas production in United Heritage's New Mexico oil and gas operation is
500,000 cubic feet per day from only two wells. Management expects a dramatic
improvement in gas production figures. Gas purchaser, Dynegy Midstream Services,
L.P., has agreed to increase its compression capacity directly after the first
of the year, which will allow UHC New Mexico
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to deliver more gas. This should allow the production from existing wells to
become approximately 1,100,000 cubic feet of gas per day. Further, this action
will cause the oil production, currently 101 barrels per day, to substantially
increase. It should be noted that this production is from only a small portion
of the existing wells and does not take into account the anticipated production
from the "infill well drilling program" currently in progress. "We have
experienced some delays with development caused primarily by weather, including
severe and unexpected rain and snow, which precluded the drilling contractor
from timely beginning the "infill drilling program". The harsh weather also
precluded UHC New Mexico Corporation from expediting its ongoing rework program
and recompletion program," said Chairman Mize.
Before the delays occurred, management believed that the potential was excellent
for achievement of the previously-stated production goal of 1,000 barrels of oil
and 1,000,000 cubic feet of gas per day by December 31, 2000.
"This goal can still be achieved," emphasized Mize, "although a little later
than previously anticipated."
"We have completed the drilling and set pipe on four of five infill wells," he
continued, "and we are in the process of drilling the fifth well. The fifth well
should be drilled with pipe set by December 31. We are now involved in the
completion of these wells . . . perforation, acid treatments, fracs, etc. We
will soon know what these wells are capable of producing. The company filed a
Form 8-K with the Securities and Exchange Commission sometime ago that outlined
this program and its anticipated results. This can be found through the SEC's
EDGAR system."
To date the company has established approximately 120 wells capable of
production utilizing casing swabbing, and 18 wells have been hooked up for gas
production. the company has reworked two out of six wells in its rework program
and recompleted two out of six wells in its recompletion program. A Form 8-K was
also filed with the Securities and Exchange Commission on this program and is
available on EDGAR.
"Even though it is written in technical terms, United Heritage management
believes it would be beneficial to include as an attachment to this press
release the current Activity Report on its New Mexico properties," said Mize.
The Activity Report can be found at the end of this press release.
UHC PETROLEUM CORPORATION
WARDLAW FIELD - 10,502 PLUS OR MINUS ACRES IN EDWARDS COUNTY, TEXAS
168,000,000 BARRELS OF OIL-IN-PLACE
25,400,000 BARRELS PROVED UNDEVELOPED/DEVELOPED
Although as management has previously stated, primary emphasis has recently been
focused on its New Mexico oil and gas properties, swabbing activities continue
in the company's south Texas oil and gas leases, known as the Wardlaw Field.
According to a March 15, 2000 report from TEC Engineering Group, an estimated
24.5 million barrels have been classified as "proven undeveloped reserves" and
912,666 barrels have been classified "proved developed
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reserves". United Heritage Corporation's auditors included data from this report
as a footnote in the financial statements dated March 31, 2000, and utilized it
in figuring the "standardized measure of discounted future net cash flows." This
standardized measure of future net cash flows was stated in Footnote 14 of the
company's Fiscal Year 2000 Annual Report as $164,662,000.
Chairman Mize added, "In the near future, we will be focusing more attention on
the recovery of these reserves, but at this time to create immediate cash flow,
our efforts are being concentrated on the New Mexico properties."
He continued, "We are also gratified by the fact that seismic lines were
recently shot across the South Texas property. These lines are currently being
analyzed and evaluated for further indications that `deep gas' may be present
under this acreage."
NATIONAL HERITAGE SALES CORPORATION
HERITAGE LIFESTYLE PRODUCTS-TM-
Dramatic sales increases continue for Heritage LIFESTYLE Products-TM- in
California and Nevada in Albertsons and Ralphs Supermarkets. This is exemplified
by three purchase orders for 12,300 cases of product being filled and shipped in
the last ten days which total approximately $400,000.00. Additionally, selected
stores of the Minyard Food Stores chain in North Central Texas continue to offer
Heritage LIFESTYLE Products-TM-.
"The company is continually pursuing additional outlets for its meat products in
supermarket chains from coast to coast across the United States," said Mize.
United Heritage Corporation has funded it's efforts from cash flow (which should
be increasing), and it's existing line of credit. The Company is exploring
additional capital sources, including increased borrowings, to fund the
continuation of the efforts outlined in this update.
ABOUT UNITED HERITAGE CORPORATION:
Based in Cleburne, Texas, United Heritage Corporation is an Oil & Gas
exploration and production company with four leasehold properties totaling
30,500 acres that are estimated to contain in excess of 265 million barrels of
oil-in-place. The Company's property in the Val Verde Basin of southwest Texas
has an estimated 168,000,000 barrels of oil-in-place of which, currently, an
estimated 24.5 million barrels have been classified as "proven undeveloped
reserves" and 912,666 barrels have been classified "proved developed reserves".
The Company's New Mexico fields have an estimated 97 million barrels of
oil-in-place. United Heritage Corporation also purveys a line of specialized
premium meat products under the brand name Heritage LIFESTYLE Products-TM-,
which are marketed through several regional supermarket chains and over the
Internet at (WWW.INTERNETBEEF.COM).
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This press release includes forward-looking statements that are made pursuant to
the "safe harbor" provisions of the Private Securities Litigation Reform Acts of
1955. While these statements are made to convey to the public the Company's
progress, business opportunities, and growth prospects, readers are cautioned
that such forward-looking statements represent management's opinion. Whereas
management believes such representations to be true and accurate based on
information and data available to the Company at this time, actual results may
differ materially from those described. The Company's operations and business
prospects are always subject to risk and uncertainties. Important factors that
may cause actual results to differ are set forth in the Company's periodic
filings with the U. S. Securities and Exchange Commission.
CONTACT:
United Heritage Corporation
Walter G. Mize, President & CEO
(817) 641-3681
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United Heritage Corporation
PRESS RELEASE DATED DECEMBER 19, 2000
Attachment:
UHC NEW MEXICO CORPORATION
ACTIVITY REPORT - DECEMBER 2000
CATO (SAN ANDRES) UNIT - TOM TOM FIELD - TOMAHAWK FIELD
CHAVES AND ROOSEVELT COUNTIES, NEW MEXICO
CASING SWABBING
UHC New Mexico Corporation took delivery on the fourth truck mounted swabbing
unit December 4, 2000, making it the second Klaeger Oil Retrieval System truck
in the field. The other two truck mounted swabbing units in the field were made
by Oil Retrieval Systems, Inc. With the addition of the first Klaeger Oil
Retrieval System truck in October, swabbing production figures for October and
November 2000 rose 37% and 33%, respectively. The second Klaeger Oil Retrieval
System truck is expected to raise the swabbing production by the same margins.
Maximum swabbing production should reach a total of approximately 3,200
bbls/month in the near future assuming an oil cut of 50%.
RE-WORK PROGRAM
In July 2000, a six (6) well re-work program was designed specifically for Well
Nos. 35, 42, 43, 115, 129, and 130 which had existing pumping units and
down-hole equipment. Electricity was restored to all six (6) locations and the
re-work program began with Well No. 35. The rods, tubing, and downhole pump were
pulled and inspected. The down-hole pump was refurbished. The well bore was
treated with acid, iron inhibitors, and demulsifiers in an effort to clean the
perforations and stimulate the producing formation. Prior production for the
well was 1.5 BOPD and 6.3 MCFGPD. Currently the well is producing 9 BOPD and 170
MCFGPD and has remained steady since the treatment. The same process was
conducted on Well No. 43. Prior production was 0 BOPD and 8.4 MCFGPD. Currently
the well is producing 4 BOPD and 80 MCFGPD with limited pump action. When full
pump action is restored, production for the well should double. Re-work
procedures on the remaining four (4) wells are in the scheduling process.
RECOMPLETION PROGRAM
In September 2000, a six (6) well recompletion program was designed by
researching well records in an effort to identify wells which had remaining pay
zones that had not been previously produced. Well Nos. 35, 36, 37, 38, 66, and
103 were chosen. The recompletion program began with Well No. 66. Records
indicated that the P2 zone in the well tested 1.8 MMCFGPD in 1966. A packer and
expendable plug was placed above the P2 zone and the well was produced from the
P1 zone. Gas sales lines were not installed and useable in the Cato until mid
August 1968 which is the probable reason for Pan American setting the packer
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and plug above the P2 zone. UHC New Mexico Corporation entered the well bore and
found the packer and plug to be at the correct depth. With the aid of a reverse
unit, the packer and plug was drilled loose and pushed to the bottom of the
hole. The P2 zone was isolated and treated with acid. The treatment fluid was
swabbed back through the tubing and shut-in. Currently the well remains shut-in
until a flow line can be laid. The well has 500 psi on the tubing. After the
flowline is connected, a production test will be conducted.
The program then moved to Well No. 37. Well records indicated that the P2 and P1
zones had never been perforated, tested, and produced. UHC New Mexico
Corporation entered the well bore and found an obstruction in the hole well
above the P1 zone. This obstruction was drilled loose and pushed to the bottom
of the hole. The P2 zone was isolated and pressure was applied. The pressure did
not hold which indicated open perforations. The same process was repeated on the
P1 zone with the same results. The P2 and P1 zones were isolated and acidized.
The treatment fluid was swabbed back through the tubing and the well was shut-in
for pressure evaluation. The well was put on line and is currently producing 350
MCFGPD and 0.69 BCPD with 290 psi flowing tubing pressure. Recompletion
procedures on the remaining four (4) wells are in the scheduling process.
INFILL DRILLING PROGRAM
On November 14, 2000, the first infill well was spudded. Well No. 328 was
drilled to a total depth of 3448'. The P1 zone was encountered from 3160' -
3198'. The drilling samples revealed a micro-fine crystalline dolomite with a
trace of intercrystalline and vugular porosity. There was a strong odor, light
yellow fluorescence, and an even, wet cut. Gas bubbles were observed breaking
out of the samples. The hydrocarbon detectors in the field reflected a gas show
in the interval and a drill stem test on the interval revealed the same,
recovering 60' of gas and drilling mud. The P2 zone was encountered from 3222' -
3270. The drilling samples revealed a very fine - fine crystalline, sucrosic
dolomite with abundant intercrystalline and vugular porosity. There was bright
yellow fluorescence and a very fast, bright yellow, wet cut. Dark brown oil
stains and abundant gas bubbles were observed. Hydrocarbon detectors in the
field reflected good oil and gas shows. The P3 zone was encountered from 3302' -
3322'. The drilling samples revealed a micro-fine crystalline dolomite with
intercrystalline porosity. There was light yellow fluorescence and a fast, even,
wet cut. Brown oil stains and abundant gas bubbles were observed. Hydrocarbon
detectors in the field reflected good oil and gas shows. Open hole logs were run
at total depth and consisted of a Density-Neutron, Gamma Ray, Azimuthal
Laterolog, and a Micro-CFL. Porosity in the P1 zone was 7%, the P2 zone was
17%-22%, and the P3 zone was 14%-22%.
On November 27, 2000, the second infill well was spudded. Well No. 302 was
drilled to a total depth of 3447'. The P1 zone was encountered from 3138' -
3176'. The drilling samples revealed a micro-very fine crystalline, slightly
sucrosic dolomite with a trace of intercrystalline porosity. There was a trace
of light yellow fluorescence and a slow, even, wet cut. Brown oil stains and
occasional gas bubbles were observed. Hydrocarbon detectors in the field
reflected good oil and gas shows. The P2 zone was encountered from 3196' -
3254'. The drilling samples revealed a micro-very fine crystalline, sucrosic
dolomite with intercrystalline porosity.
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There was light yellow fluorescence and a fast, even wet cut. Brown oil
stains and gas bubbles were observed. The hydrocarbon detectors in the field
reflected good oil and gas shows. The P3 zone was encountered from 3284' -
3318'. The drilling samples revealed a micro - very fine crystalline, surosic
dolomite with intercrystalline porosity. There was light yellow fluorescence
and a fast, even wet cut. Brown oil stains and occasional gas bubbles were
observed. The hydrocarbon detectors in the field reflected good oil and gas
shows. Open hole logs were run and indicated 8% porosity in the P1, 7%-17%
porosity in the P2, and 10%-21% porosity in the P3.
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The third infill well was spudded on December 4, 2000. Well No. 334 was drilled
to a total depth of 3599'. The P1 zone was encountered from 3352' - 3404'. The
drilling samples revealed a micro-very fine crystalline, slightly sucrosic
dolomite with some intercrystalline porosity. There was a fair odor, light
yellow fluorescence, and bleeding, wet cut. A trace of oil stain and gas bubbles
were observed. The hydrocarbon detectors in the field reflected an oil and gas
show. The P2 zone was encountered from 3432' - 3452'. The drilling samples
revealed a micro-very fine crystalline, relatively "tight" dolomite. There was
light yellow fluorescence and a slow, wet cut. The hydrocarbon detectors in the
field reflected an oil and gas show. The P3 zone was encountered from 3510' -
3542'. The drilling samples revealed a micro-very fine crystalline, moderately
dense dolomite. There was no visible oil stain or fluorescence, however, the
hydrocarbon detectors in the field reflected a slight gas show in the zone. Open
hole logs were run and indicated 7%-17% porosity in the P1 zone, 6%-10% porosity
in the P2 zone, and 7%-17% porosity in the P3 zone.
On December 8, 2000, the first phase completion operations began on Well No.
328. The P3 zone was perforated and the initial acid treatment was conducted.
The final acid treatment is being scheduled. After the final acid treatment on
the P3 zone, the well will be evaluated for production in that zone.
Pipe was set on the fourth infill well December 18, 2000. Details are not
available in written form at this time. The fifth infill well was spudded
directly thereafter
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THIS REPORT CONTAINS FORWARD-LOOKING STATEMENTS BASED ON CURRENT
EXPECTATIONS THAT INVOLVE A NUMBER OF UNCERTAINTIES, SUCH AS THE VARIOUS RISKS
ASSOCIATED WITH EXPLORATION AND PRODUCTION OF OIL AND GAS. DETAILS ON THE
FACTORS THAT COULD AFFECT UNITED HERITAGE CORPORATION'S FINANCIAL RESULTS ARE
INCLUDED IN UNITED HERITAGE CORPORATION'S SECURITIES AND EXCHANGE COMMISSION
(SEC) FILINGS, INCLUDING THE LATEST ANNUAL REPORT ON FORM 10-K AND ON ITS
QUARTERLY REPORTS ON FORM 10-Q.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf of the
undersigned hereunto duly authorized.
UNITED HERITAGE CORPORATION
Date: December 19, 2000 BY: /s/ Walter G. Mize
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Walter G. Mize, President and
Chief Executive Officer
