US-focused oil producer Winchester Energy (ASX: WEL) is pushing on with its Permian Basin exploration plans following a recently announced $6.4 million capital raising, with two wells expected to spud in December.
In an update to the market today, the company said it is also assessing the production and reservoir characteristics of additional zones in its Lightning prospect discovery well, Arledge 16#2.
Following successful completion work on the Lower Cisco sands, Winchester will now include additional completion stages over a 340-foot gross interval above these sands, between 4,735-5,075ft.
If additional production is encountered, the company plans to combine it with existing production.
In addition, Winchester plans to commence drilling a step-out well at its 100%-owned Lightning prospect in December.
This well will target the same Cisco sands as the Arledge 16#2 discovery well, representing a low-risk opportunity for Winchester to potentially boost production.
Meanwhile at the Mustang oilfield in the company’s White Hat Ranch lease, the recently drilled White Hat 20#4 well has been perforated and acidized across the Strawn Fry sand member.
The well has swabbed oil and is now shut-in for a pressure test ahead of fracking scheduled in early December, Winchester reported.
It said its next Mustang well, White Hat 39#2, is scheduled to spud in the first half of December.
Following this, development well White Hat 20#6 is expected to commence drilling in January.
According to Winchester, additional Mustang locations are in the process of being located and permitted for drilling.
The company’s working interest in the Mustang field ranges between 50-75%. It is partnered with US private company Carl E Gungoll Exploration (CEGX).
However, CEGX has recently elected not to participate in the completion of White Hat 20#4, allowing Winchester to upgrade to a 100% working interest in this well. CEGX is able to exercise a 25% working interest back-in, but only after Winchester has recovered 300% of its completion costs.
Today’s news follows last week’s announcement that Winchester had received firm commitments from institutional and professional investors for a placement to raise $6.4 million to accelerate exploration and production activity in its East Permian Basin acreage in Texas.