Texas-focused oil and gas junior Winchester Energy (ASX: WEL) has flowed oil from a White Hat Ranch well ahead of a highly anticipated fracture stimulation program at the Permian Basin oil lease.
The explorer and producer on Friday reported a simple perforation and acidisation procedure was completed on a 20-foot section of the Strawn formation in the White Hat 39#1L well prior to shutting the well in overnight.
Upon opening the well the following morning, it immediately flowed 88 barrels of oil, Winchester said.
According to the company, swabbing of the well was then undertaken with initial production rates of about 200 barrels of oil per day at an oil/water cut of 75-100%.
A pump jack has now been placed on the well with some variability in production rates being observed as the well stabilises.
The original completion plan for White Hat 39#1L comprised a hydraulic fracturing program, which has not yet been undertaken. Winchester said the frack crew have been placed on standby and “may be deployed depending on ongoing monitoring of flow rates”.
“Should production persist, this is an exciting result for Winchester given the Strawn formation is the largest producing stratigraphic interval in [the] Nolan and Coke counties with over 65 million barrels of oil produced,” the company stated.
The “bail-out” formation
The targeted Strawn formation is a second chance for the White Hat 39#1L well, after it was unsuccessful at sustaining commercial flow rates from the Ellenburger formation back in July.
“This is the second well drilled in the White Hat Ranch in which the Ellenburger proved non-commercial, but appears to have a potential commercial and successful outcome in the shallow ‘bail-out’ Strawn formation,” Winchester managing director Neville Henry said.
“The company is now focusing on further developing the Strawn interval and has high hopes it can become a significant producer over our entire 17,000 net acres,” he added.
The Strawn formation has been mapped over Winchester’s entire acreage with well and 3D seismic data.
It is a proven producer in the White Hat Ranch oilfield, having produced more than 30,000 barrels of oil from the nearby White Hat 20#2 well after 17 months of production.
Another well, White Hat 38#3ML, was perforated and tested 20bopd over three days from the Strawn sand during the June 2018 quarter. Winchester is planning to fracture stimulate the Strawn interval in this well once White Hat 39#1L has stabilised and been successfully brought online.
The formation is also considered the prime target in the Mustang, Spitfire and El Dorado prospects which the company has recently identified for drilling in the near-term.