Oil and Gas exploration company Winchester Energy Limited (ASX: WEL) announced that it has commenced drilling at the Mustang Prospect, in the Permian Basin, Texas. It is targeting the Strawn formation by spudding the White Hat 20#3 well. The Mustang Prospect is believed to have high estimate P10 of 5 million bbls recoverable and prospective resource target P50 of 2 million bbls recoverable. It is expected that spudding at White Hat 20#3 will reach a total depth of 6,870 feet in approximately 10 days.
In its significant forthcoming exploration drilling campaign, White Hat 20#3 represents the first well, and the company would be drilling several new vertical wells targeting Prospective Resources within the Mustang, Spitfire and El Dorado prospects over the coming months.
WEL is also expected to perform additional low-cost operations on several wells in the near term which will include a slickwater frack of the Strawn sands in White Hat 38#3ML and a pad acid frack of the Strawn Lime in White Hat 39#1-L.
As per the reports, over 100 million barrels of oil from the Strawn Formation and the Ellenburger Limestone were produced at the area of the Eastern Permian Basin surrounding Winchester’s large leasehold position. There were many pieces of evidence of the oil-bearing potential of this ‘new‘stratigraphic play at the Mustang Prospect based on reprocessing of 3D seismic data and detailed analysis of past wells drilled within Winchester’s large leasehold. The first evidence is of White Hat 20#2 well and later White Hat 20#3 which was to determine whether the Mustang Prospect stratigraphic trap as interpreted extends over an area of up to 2,000 acres. Both wells are strategically located at a distance of 510 meters.
Well, White Hat 20#2 produces oil from the Strawn sand with an initial production rate of 200 bopd (barrels of oil per day) following a frack stimulation and continues to produce oil at 40 bopd. Recently Mire and Associates had increased the estimated ultimate recovery (EUR) from the White Hat 20#2 well to 112,000 barrels of oil (bo).
Its secondary target was the production of 150,000 bo from the Ellenburger formation with an initial production rate of 100 bopd from the well JF#3. This well is located 420 meters to the southwest of White Hat 20#3. Additionally, the company has White Hat 21#1 and White Hat 21#4 wells to the northeast of White Hat 20#2 where the estimated probability of success for both targets is 58%
A private independent Texas-based company, Carl E Gungoll Exploration LLC (CEGX) has elected to participate for a 25% working interest in the drilling of White Hat 20#3.
On stock information, Winchester Energy’s share last traded at $0.02 on March 19, 2019, with the market capitalization of ~$6.55 Mn. Its loss per share stood at 0.091 AUD. Its 52 weeks high was reported at $0.051. Its absolute return for one year, six months, and three months are -56.67%, 8.33%, and -4.76% respectively.
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