Following successful oil flows from the White Hat 20#3 well in Texas’ Permian Basin, Winchester Energy (ASX: WEL) has announced plans to drill an additional well at the Mustang prospect next month.
The junior oil producer said permitting has commenced for the new development well, White Hat 20#4, with a spud date scheduled in July.
It will be an immediate step-out well located 420m from White Hat 20#3, which has been consistently pumping oil at a rate of around 296 barrels per day after six days of production.
According to Winchester, it will be a low-risk well which, if successful, is expected to boost the company’s net oil production from the White Hat Ranch in Texas.
Winchester drilled White Hat 20#3 in March, observing oil and gas shows in the primary target Strawn sand as well as the Wolfcamp D shale, Strawn lime, Caddo and Ellenburger formations.
It too was stepped out from the nearby well White Hat 20#2, which has been producing oil for more than two years.
White Hat 20#3 was intended as the first in a three-well exploration drilling campaign planned across Winchester’s White Hat Ranch acreage, with the two other wells targeting the Spitfire and El Dorado prospects.
Though given its immediate success, Winchester is now planning further development at the Mustang prospect.
Last month, the company announced it was remapping potential northern and southern extensions of the Mustang field and was planning a drilling program to develop the central lobe of the prospect.
White Hat 20#4 will be the first in potentially 15 well locations.
Winchester managing director Neville Henry said the well represents a “low-risk opportunity to further increase oil production and also increase confidence in the newly-discovered Mustang oilfield”.
In addition, Mr Henry said the El Dorado and Spitfire prospects represented even more “genuine upside” for the company.
According to Winchester, the Mustang prospect has a prospective resource target best-estimate (P50) of 1.43 million barrels of recoverable oil and a high-estimate (P10) of 3.76MMbbls of recoverable oil from the Strawn sand.
The company has a 75% stake in White Hat 20#4 with private Texas-based partner Carl E Gungoll Exploration holding the right to participate at a 25% working interest.