Texas producer Winchester Energy (ASX: WEL) netted $503,876 in the December quarter, a result assisted by recovering global oil prices.
Its average sale price per barrel of oil was US$37.81.
Oil prices have continued to improve since the end of the quarter and overnight in the US West Texas Intermediate (WTI) futures had risen past US$52 per barrel (/bbl).
This week, also, Barclays said it expects the U.S. oil benchmark to average US$52/bbl in 2021 due to a weaker US dollar and expected higher demand for winter fuels because of the cold snap in the northern hemisphere.
Winchester confirmed in its quarterly report that WTI prices continued to improve in the three months to 31 December and this is bolstering sales revenue for the company.
The company added that gas sales continue to be augmented by additional production from its Cisco Sands wells, Arledge 1602 and McLeod 1703, which had been tied into the local gathering systems in the September quarter.
The December quarter, being the first full quarter of gas production from these wells, recorded a net aggregate of 26.3 million cubic feet (mmcfg) of gas across all its gas producing wells.
Production during the December quarter averaged 187 barrels of oil equivalent per day (boepd) net to Winchester, compared with 192boepd in the preceding three months.
Gross oil production of the wells for the December quarter was 23,206 barrels of oil equivalent (boe), of which 17,184 boe were Winchester’s share of output.
More than half a million barrels so far
To 31 December, Winchester’s Permian Basin wells in Nolan County, Texas, have generated a total gross of 520,653bbl of oil and 268mmcfg of gas.
The company says it is close to completing a comprehensive review of prospects and leads within its 18,856-acre leasehold position.
Recommendations resulting from that review, and a 2021 strategy update, are imminent.
In 2020 Winchester completed a 3D seismic reprocessing program covering the bulk of the acreage to help improve the production from the Strawn and Cisco intervals.
The company, in the December quarter, also undertook a recompletion program at its White Hat 3810 well to test previously unidentified thin sandstones and laminations, known as Bonus Sands.
The program tested previously unmapped sands in the shallower formation than were the targets in the original drilling four years ago.
However, no commercial hydrocarbons were encountered and the well has been shut in.