Oil and gas producer and developer Fremont Petroleum (ASX: FPL) has increased its acreage position at its wholly-owned Pathfinder oil property in Colorado’s Denver-Julesburg Basin.
The company today announced it has added 2702 net acres (10.9sq km) to the Pathfinder project, bringing the total area to about 19,500 net acres (78.9sq km).
The terms of the acquisition remain confidential as the company said it is actively securing more leases. However, it stated the acreage was secured on “favourable terms based on future exploration commitments and royalty payments”.
Pathfinder is located within the Florence oilfield, the second oldest and one of the most economic fields in the US.
As a result of this acreage expansion, Fremont now has a much larger, contiguous footprint across the Florence field, which has produced 16 million barrels of oil from the shallow Pierre formation.
In addition to future production from Pierre, the company plans to target oil and gas deposits in the deeper, undeveloped Niobrara and Greenhorn formations.
Fremont president and chief executive Timothy B Hart said recent comparable acquisitions for undeveloped Denver-Julesburg Basin acreage validated the “considerable value” this transaction has added to the company.
“Flow rates recorded from testing of the Pathfinder C11-12 horizontal well, our only Niobrara producer, shows that the contiguous Niobrara formation is very productive for oil and gas in the Pathfinder field.”
“This is why we are actively growing our overall lease position,” he explained.
Hart said the company now planned to “exploit all depths and all formations in the field more aggressively”.
Pathfinder flow tests
In June, Fremont reported an initial gas flow rate at its Pathfinder C11-12 well of 1.6 million cubic feet per day.
In early July, the company announced two other wells at the project, Columbus and Marco Polo, were flowing gas at higher than anticipated rates of 1.03mmscfd and 1.5mmscfd, respectively.
This cumulative initial 24-hour flow rate of 4.13mmscfd has led Fremont to believe the Pathfinder field contains a much greater resource than its current estimation of 220 billion cubic feet of gas.
Colorado-based consultants Gustavon Associates have been engaged to conduct a new independent oil and gas reserves and resources report for the Pathfinder property, which will now incorporate reserves and resources associated with the newly acquired land.
Fremont shares were up 10% at A$0.011 on the news by afternoon trade.