Texas-focused oil and gas junior Winchester Energy (ASX: WEL) has kicked off a large drilling campaign in the Permian basin, spudding the new White Hat 20#3 well at the Mustang prospect.
The company is targeting the Strawn formation at the prospect, with Winchester set to reach a total depth of 6,870 feet at the well within about ten days.
White Hat 20#3 is a step out on a large stratigraphic sand play within the Strawn formation and will also test fractured Ellenburger and Strawn units. Winchester’s internal estimates have determined there is a 58% chance of discovering oil within the well.
White Hat 20#3, which the company has a 75% working interest in, marks the first well from the company’s Permian Basin exploration program designed to test the Mustang, Spitfire and El Dorado prospects.
Mustang has a prospective resource target best estimate P50 of 2 million barrels recoverable and a high estimate P10 of 5 million barrels recoverable oil.
3D seismic underpins insights
Winchester said the recent reprocessing of 3D seismic data and detailed analysis of past wells drilled within its large leasehold had defined several overlooked stratigraphic traps in the Strawn formation.
The first evidence of the oil-bearing potential of this ‘new’ stratigraphic play, dubbed the Mustang prospect, was the successful White Hat 20#2 well.
While the strategy of drilling vertical wells on stratigraphic traps marks a new direction for the company, the 3D seismic has underpinned the company’s confidence boost to drill the major stratigraphic traps with significant prospective resource size.
Drilling of multiple wells on the horizon
Winchester is anticipating significant news-flow in the coming months, in line with the drilling of several wells across the Mustang, Spitfire and El Dorado prospects as well as numerous frack completions in existing wells across several different known hydrocarbon-producing units.
While Mustang remains an exciting prospect, the company said the Spitfire targets also remained of interest, given drilling success could open up a new horizontal drilling and multistage frack play in Winchesters large leasehold.
All up, Winchester has an expansive 17,266-acre leasehold position in the prolific oil producing Permian Basin, seeing significant upside from the area to assist it to grow production and reserve numbers.
A flurry of industry activity is already taking place to the north of the company’s leases in the Strawn Formation with horizontal drilling and multi-stage frack completions reporting initial flow rates of up to 1,431boe per day.