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After two days of trading halt, the shares of emerging energy company Eon NRG Ltd (ASX: E2E) resumed trading on ASX today, with the company releasing the results of petrophysical interpretation and analysis performed by Schlumberger on the first Powder River Basin (PRB) well- the Govt Kaehne #9-29 well.
Eon is of the view that it seems to have identified an excellent quality reservoir with good oil shows in both the primary and secondary target formations.
The results from the logs on the #9-29 well have confirmed Eonâs understanding of the reservoir and has given it the confidence to continue with the future development plans.
Time and again, Eon had communicated that after reaching the Total Depth (TD), it intends to perform a series of drill stem testing and suite of geological logging on the Govt Kaehne #9-29 well to determine the deliverability of hydrocarbons.
With the excellent performance of the CapStar drilling crew and active supervision from the on-site management resulting in the well reaching TD of 6,460 feet on 27 November 2019 - two days ahead of schedule, the company got busy with logging and testing the well.
Schlumberger Log Interpretation & Analysis supports presence of producible hydrocarbons
Schlumberger wireline logs were run after reaching on reaching the TD. Subsequently, the logs were sent to Schlumberger for further petrophysical analysis and insight into potential pay zones within the Dakota and Muddy formations as both formations are present and productive within the field.
The well was targeting oil production from the Dakota Sandstone Formation with a secondary formation being the shallower Muddy Sandstone Formation.
The initial indications are that an excellent quality reservoir has been encountered at both the target formations, as summarized below:
- Total of 21â of net pay in the Govt. Kaehne 9-29 well;
- Dakota formation has 14â of net pay beginning at 6,322 feet;
- Muddy formation shows 7â of net pay beginning at 6,068 feet;
- Good to excellent oil shows and gas shows exceeding 1,000+ units in each of the formations;
- Micro-log interpretation shows good horizontal permeability throughout the Dakota and Muddy.
Background to development of Govt Kaehne #9-29 well:
- Eon acquired 15,000 acres of leasehold in the Powder River Basin in October 2018;
- The first drilling prospect that was identified in this acreage is located in an existing oil field, Donkey Creek North in Crook County, Wyoming;
- Environmental and archeological surveys were carried out on and around the well location in the spring of 2019;
- Applications to drill the new well were granted in July 2019;
- The well pad and access road for the new well were built in August and completed in September
- Joint venture funding was finalized in November 2019;
- Drilling of the Govt Kaehne #9-29 commenced on November 19, 2019;
- TD of well was reached on November 27, 2019.
The drilling of the Govt Kaehne #9-29 well validates the view that Eonâs management can effectively identify and execute the drilling of a successful well and forms a strong base to launch the next phase of the Companyâs development plan.
Forward Plan
- Eon expects to conclude the completion phase within 45 days. Subsequently, the time production will be brought online ready for sales to commence.
- The company then expects the first delivery of oil to the refinery in January 2020 with the payment for these deliveries within the following month.
- Eon expects to acquire additional production/drill additional wells in 2020, evaluating further drilling and production opportunities.
Eon will continue targeting conventional wells in the Powder River Basin that will provide a strong business model to deliver value accretion through long term production growth and improved cash flow.
E2E stock traded at a price of $0.005 with a market cap of $4.62 million on 4 December 2019.
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