Fremont Petroleum (ASX: FPL) expects the J.W. Powell well in Colorado will bolster its revenue after it encountered strong initial oil and gas flows.
The company, which has offices in Sydney and Colorado, said the J.W. Powell 23-25 well had produced solid oil and gas volumes from the Niobrara Formation, commonly referred to as the Niobrara Shale.
Crude oil is now flowing into the temporary tanks on location which will generate immediate revenue, with the well producing a 15-foot gas flare in these very early stages.
Importantly, Fremont sees further upside potential with flow rates expected to increase materially as the balance of the frack fluids are unloaded from the well bore.
Fremont managing director and chief executive officer Timothy Hart said the company now had another solid oil and gas producer online in the Pathfinder field.
“This well conclusively confirms that the Niobrara Formation is very productive in the Pathfinder field and it adds hugely to the value of our acreage,” he said.
“This is simply an outstanding oil and gas field that is vastly undeveloped and has massive upside.”
The company will provide shareholders with further updates as flow rates build with an initial production rate forecast to be established next week.
Fremont holds about 87 square kilometres of acreage at its wholly-owned Pathfinder oil property in Colorado’s Denver-Julesburg Basin after aggressively growing its lease position last year.
Pathfinder is located within the Florence oilfield, the second oldest and one of the most economic fields in the US.
Fremont recently said that the Pathfinder project was large enough to accommodate more than 500 wells, with the company currently operating 26 oil and gas wells in the field with two additional wells in the development phase.
A 2018 independent estimate calculated a 90% probability that Pathfinder contains a resource of 54 million barrels of oil and 540 billion cubic feet of gas.
Fremont shares jumped 33.3% in morning trade to $0.012.