In a well completion update provided on 12 December 2019, the company highlighted the drilling update and completion of the Govt Kaehne #9-29 well of which it is the operator (61% working interest), notifying that the production and first delivery of oil is expected in January 2020 with the payment for oil deliveries in the subsequent month.
A week ago, the company had informed about the encountering of excellent quality reservoir with good oil shows in both the Dakota Sandstone Formation (primary target) and Muddy Sandstone Formation (secondary target).
The Capstar #311 rig successfully completed the drilling of the #9-29 well to a total depth of 6,460 on November 27, two days ahead of schedule. Following which, the wire-line formation logs from the well were analysed and interpreted by Schlumberger which provided sufficient data to determine that hydrocarbons were in place and that the completion was likely to achieving a commercial well.
With encouraging interpretations of the two intersected formations and good oil and gas shows in the mud-logs from the Schlumberger wireline log analysis, the company decided to run 5½” production casing and cement in readiness for the completion phase.
- A completion rig will be mobilized to site within the next 10 days to make a bit and scrapper run in order to prepare the wellbore for completions;
- Subsequently, wireline will run a cement bond log and perforate the casing in the Dakota Formation;
- Swab test will also be carried out to provide an indicative production rate which will be used to confirm pump settings and oil storage requirements;
- Oil will be stored on site and then transported to the refinery collection point by truck;
- First delivery of oil is expected in January 2020;
- Payment for oil deliveries is expected to be made in the month following delivery.
Lens through Govt Kaehne’s significance
- Well is located in a structurally high position in a reservoir that is oil rich with 30-40’ of pay expected in the Dakota Formation;
- Close to service town (Gillette) and good access for transportation of the oil from storage;
- Strong water drive which results in higher recovery and lower production decline rates;
- Offset wells have good initial production rates (IP’s) and estimated ultimate recovery (EUR);
- The well is also located in the North Donkey Creek Field approximately 22 miles east of Gillette, Wyoming, a major service center for the oil and gas industry in PRB;
- Eon believes that this new well could add significantly to its existing production capacity.
In just around 14 months of period, Eon has come a long way from acquiring 15000 acres of PRB leases in September 2018 to completing the drilling of the first well, with first oil delivery expected in the next month. This is truly a significant achievement for the company and a step closer in expanding its existing production capacity.
The first well drilled in the E2E’s extensive PRB acreage has proven the management’s expertise to discover and implement the drilling of a successful well, while significantly eyeing the next phase of company’s development strategy.
E2E’s stock last traded at a price of $0.005 with a market cap of ~ $3.85 million on 12 December 2019.
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