Winchester Energy confirms oil pay in Mustang development well

Winchester Energy ASX WEL confirms oil pay Mustang development well
Winchester Energy has encountered “good” oil and gas shows within the primary target of its Mustang 20#5 well, with wireline logs indicating 20 feet of net oil pay.

Onshore oil producer Winchester Energy (ASX: WEL) has hit oil pay while drilling through the primary Fry sand target of its latest development well on the Mustang oilfield in Texas’ Permian Basin.

The US-focused company today reported the encounter of “good” oil and gas shows within its Mustang 20#5 well, the first Mustang development well to be drilled on its White Hat Ranch acreage.

Wireline logs have indicated a gross sand thickness of 50 feet and net oil pay of 20ft, with good porosity of up to 15% through the Fry sand and no water.

Winchester said this thickness and net oil pay is “highly encouraging” as it is similar to the interval found in the successful White Hat 20#3 well, which was brought online in May and continues to produce 200 barrels of oil per day.

Today’s news also follows other recent success by the company, including the recovery of “significant” oil from the Arledge 16#2 well on the Lightning prospect in Winchester’s nearby Arledge lease last week.

Mustang oilfield

The Mustang oilfield within Winchester’s White Hat Ranch lease has a best estimate (P50) prospective resource of 2 million barrels of oil equivalent recoverable and a high estimate (P10) of 3.8MMboe recoverable.

The first evidence of the oil-bearing potential of the Mustang prospect was the White Hat 20#2, which had a post-frack initial production (IP) rate of 200bopd and has been producing oil for more than two years.

Winchester then achieved further success with the Mustang 20#3 well, bringing it into production three months ago with an IP rate of 306bopd. This lead to a significant jump in production and sales revenue for the June quarter.

Development optimisation studies identified an additional nine well locations within the central Mustang area, to be followed up by a possible 25 wells across the oilfield’s north and south, subject to ongoing development drilling success.

Winchester spudded White Hat 20#5 in mid-August and drilling has now reached a total depth of 6,300ft. The wireline logs indicated the oil pay between 5,990-6,040ft.

Production casing is currently being run and the well will be perforated with the Fry sand to be fracture stimulated within the next two weeks, Winchester reported.

The company is also finalising locations for the next Mustang oilfield development wells, White Hat 20#4 and White Hat 39#2.

Winchester has a 75% stake in the Mustang wells with private company Carl E Gungoll holding the remaining 25% working interest.

Further potential oil pay

Winchester said the drilling and logging of White Hat 20#5 identified several additional intervals that have potential for future oil production and development.

According to the company, oil shows were also observed in the San Angelo sands from about 800-900ft, and 20ft of net log “potential” oil pay was identified in the Canyon formation Crystal Falls unit.

An approximate 200ft thick Wolfcamp D Three Fingers shale interval also exhibited oil and gas shows, while 20ft of net log potential oil pay was observed in the Strawn lime above the targeted Fry sands.

Winchester said “good” oil shows were encountered throughout the Strawn lime.

These intervals could represent additional upside for the company and are likely to be production tested at a later date. However, the company said its current focus is on completing the well as a Fry sand oil producer to add to the current Mustang oilfield production.

Danica has extensive experience writing and editing business news in the Oceanic and Southeast Asian regions. She has written across a range of industries including oil and gas, mining, energy, science and research, retail and travel. Danica has covered small and large cap companies listed on the Australian, Singapore, Hong Kong, Indian, London and Toronto exchanges.