Eon NRG Reaches Total Depth of Govt Kaehne #9-29 well, two days ahead of Schedule

Emerging energy player, Eon NRG Limited (ASX: E2E) inches one step closer to complete its first Powder River Basin (PRB) well - the Govt Kaehne #9-29 well.

CapStar #311 rig, the preferred drilling contractor of #9-29 well, reached total depth (TD) of 6,450 feet on Wednesday 27^th two days ahead of schedule, amidst no operational challenges as a result of good planning and a highly competent team of drillers and contractors.

The Govt Kaehne #9-29 well was spudded on 19 November 2019, following which the CapStar #311 drill rig was mobilized to site. It was then estimated that CapStar #311 rig would take 12 days to reach the total depth of approximately 6,400 feet (1,950 meters).

Advancing well on the drilling, CapStar #311 reached the TD well ahead of schedule.

Managing Director John Whisler commented:

“We are excited to reach TD on target and look forward to logging and testing the well over the next 48 hours”

Lens through Drilling Story

• The surface hole was drilled to 2,050 feet and 8⁵/₈ inch surface casing was set and cemented within 24 hours of spud time;
• Subsequently, the rig then commenced drilling a 7⁷/₈ inch directional hole to 6,460 MD feet intersecting both the Muddy (secondary) formation and the Dakota (target) formation;
• The directional plan has been executed extremely close to design and there have been no unexpected geological anomalies that have caused any drilling delays.
• Notably, at 6,056 MD feet, the first hydrocarbon bearing formation (Muddy) was intersected with good oil and gas shows;
• Further, the primary hydrocarbon bearing formation (Dakota) was intersected at 6,279 MD feet with strong oil and gas shows.

Over the next 48 hours, the company will perform a series of geological open hole logging and drill stem testing to determine the deliverability of hydrocarbons from both formations.

It is to be noted that ongoing costs of the well, which includes drilling and completion costs, is being contributed by the joint venture participants who acquired a 39% working interest in the well for approximately USD 111,000. The sale of minority interest is expected to de-risk the development program, ensuring that the company is well-funded for its drilling plans for the first PRB well.

Among the eight Joint venture participants, Mr Matt McCann (Eon’s Chairman) and Mr John Whisle (Eon’s Managing Director) have committed to acquire a 10% and 3% working interest respectively, demonstrating their confidence in the long-term potential for the well.

Development story of #9-29 well

The #9-29 well is located in the North Donkey Creek Field, ~ 22 miles east of Gillette, Wyoming (a major service center for the oil and gas industry in the Powder River Basin). Eon is the operator of the well and holds 61% working interest (WI) and a 53.4% net revenue interest (NRI).

Eon expects the new well to add significantly to its existing production capacity. Below is the development story of the well:

• Applications to drill the new well were granted in July 2019;
• Work has been carried out to finalise supply contracts for various equipment and services that will be required through the drilling phase;
• The Master Service Agreement has been completed, and insurances are now in place;
• CapStar Drilling has been assigned as the preferred contractor to drill the Govt Kaehne #9-29 well;
• The well pad and access road for the new well were built in August and completed in September;
• The Joint Venture funding was finalised in November 2019.
• Subsequently, the #9-29 well drilling commenced.

With Joint venture participants contributing to the ongoing costs for the well, Eon is well placed to conduct the drilling operations at its first PRB well.

At market close on 28 November 2019, E2E stock was trading at a price of $0.005 with a market cap of around $3.85 million.

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