Winchester Energy produces oil from White Hat 20#6, Lightning oil field advances
Texas-focused oil and gas explorer Winchester Energy’s (ASX: WEL) White Hat 20#6 well has been fracture stimulated and is now producing oil.
The well is located in Texas’ Permian Basin and effectively extends the company’s Mustang oil field.
With a production rate of 104 barrels of oil per day and 26 barrels of water per day, White Hat 20#6 is now Winchester’s sixth well in the Mustang field and was drilled, logged and completed within budget.
All up, the Mustang field has generated more than 130,000bbl of oil, which has provided “significant” revenue for Winchester in US dollars.
“Further, current production across Winchester’s acreage generates positive cash flow at prevailing low prices,” the company noted.
Private company Carl E Gungoll Exploration has a 25% working interest in White Hat 20#6.
Lightning oil field
Meanwhile, over at Winchester’s Lightning oil field, the Arledge 16#2 well has now given up more than 7,000bbl oil – mostly from the Lower Cisco Sands.
A second follow up well in the Lightning field was McLeod 17#3, which was designed to test the test the Upper and Lower Cisco Sands.
Drilling of McLeod 17#3 began in December last year and reached a total depth of 5,692 feet. Initial wireline logging indicated 414ft of gross pay across both sections.
Winchester has perforated and acidized the Lower Cisco Sand section with swabbing recovering up to 30% oil from multiple intervals.
It is currently flowing back oil and water at low rates and Winchester is evaluating whether to add the Upper Cisco Sand section shortly.
Winchester noted it would continue to assess McLeod 17#3 to determine its viability and long-term productivity to optimise future oil production.
Positioned to withstand COVID-19 impact
With oil prices plunging due to a reduced demand amid the ongoing COVID-19 pandemic, Winchester revealed yesterday it was able to maintain positive cash flow.
The company’s managing director Neville Henry pointed out to shareholders, Winchester’s board and management has successfully navigated multiple downturns over the last 40 years.
In the December quarter, Winchester achieved oil and gas revenue of $1.79 million – up 50% on the September period.
Additionally, Winchester explained it was poised to benefit from higher oil prices when they rebound.
Brent Crude Oil Futures was last attracting about US$27.15/bbl.