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Vintage Energy reports spudding of Cervantes-1 oil exploration well

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By Imelda Cotton - 
Vintage Energy Metgasco VEN MEL ASX Cooper Basin Epsilon Formation Nappamerri Toolachee
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Explorer Vintage Energy (ASX: VEN) has reported a weekend spudding of the Cervantes-1 oil exploration well in the onshore Perth Basin.

The company confirmed a 13-3/8 inch conductor had been set and cemented to 68mand said preparations were underway to commence drilling the 12-1/4” surface hole section.

Cervantes-1 is being drilled by the L14 Cervantes joint venture comprising Vintage with 30% equity, Metgasco (ASX: MEL, 30%) and RCMA Australia (40%).

Under the terms of the venture, Vintage will earn its stake in any Cervantes discovery in the targeted Permian reservoirs through funding 50% of the total cost of Cervantes-1.

Metgasco will fund the remaining 50% to earn its stake.

The well is to be operated by RCMA, with drilling management services supplied by Aztech Well Construction.

On trend location

The Cervantes prospect is located in an area between, and on trend with, the regional Hovea and Jingemia onshore oil fields and the Cliff Head offshore oil field.

The primary objective of Cervantes-1 is to test the oil potential in the Lower Permian zones of the Kingia Formation, the Dongara Sandstone and the High Cliff Sandstone.

The well is designed to address a high side fault trap assessed to contain gross recoverable prospective resources (P50) of 15.3 million barrels of oil (4.6mmbbl net to Vintage).

The chance of success has been estimated at 28%.

Due to surface constraints, Cervantes-1 has been planned as a directional well with the surface location approximately 800m east-south-east of the subsurface primary target.

The well is scheduled to take approximately 16 days to reach a prognosed true vertical depth subsea (TVDSS) of 2,370 metres.

Fully-funded exploration

Vintage said it was fully funded to meet its share of expected costs for Cervantes-1 thanks to a recent placement and share purchase plan which raised $12 million for future projects and other capital expenditures in the company’s portfolio.

The company completed the placement to institutional and sophisticated investors in December to raise $8.5 million.

This was followed by a $2 million share purchase plan, which closed in mid-January and was heavily oversubscribed at $3.44 million.

Shares in both raisings were issued at $0.085 each.