Winchester Energy recovers fluid from White Hat wells with increasing oil cut

Winchester Energy ASX WEL operations update Mustang Propect White Hat Ranch oil field May 2019
Winchester Energy has successfully fracked two wells targeting the Mustang prospect in Texas, with plans to place its White Hat 38#3ML well on pump within the next 24 hours.

US-focused oil producer Winchester Energy (ASX: WEL) has fracked two wells within the Mustang prospect at its White Hat Ranch oilfield in Texas’ Permian Basin with oil recovery looking promising.

The company today announced fracking of the Strawn sand at the recently drilled White Hat 20#3 well has recovered 300 barrels of fluid with a 10% oil cut after two days of swabbing.

This equates to a flow rate of 150bbl of fluid per day, with the swab unit only permitted under local regulations to operate in daylight hours.

According to Winchester, the oil cut is expected to increase as the remainder of the frack fluid is recovered.

In addition, fracking of the nearby White Hat 38#3ML well, also targeting the Strawn sand at Mustang, has recovered 1,100bbl of frack fluid at early stages of flow back with an increasing oil cut from 5-10%.

Winchester said this well will be placed on pump within the next day, with final consistent flow rates to be announced once established.

Mustang production

White Hat 20#3 was designed as a step-out of the currently producing White Hat 20#2 well, also within the Mustang stratigraphic play, which initially flowed 200bbl/day of oil after fracking around two years ago.

White Hat 20#2 has recovered about 41,500bbl of oil to-date, with a total of about 112,000bbl expected to be ultimately recovered from the well.

White Hat 38#3ML, on the other hand, was hailed as a “potential game-changer” after encountering hydrocarbons when it was first drilled in November 2017, but was unfortunately too close to an existing oilfield and the horizontal leg hit a depleted oil reservoir.

However, fracking in the Strawn sands has started to turn this bad luck around, with the well flowing 700bbl with minor oil shows even prior to swabbing.

Today, Winchester managing director Neville Henry said the fracking results of the Strawn sand in the current Mustang prospect wells would provide further input to the company’s development options for the prospect.

The company has previously announced its intentions to rapidly bring the White 20#3 well into production.

It is the first in a three-well exploration drilling program planned over the next three months, to be followed by wells targeting the El Dorado and Spitfire prospects.

The three prospects have a combined best to high estimate prospective resource of 7.8-17.5MMbbl of recoverable oil.

White Hat 39#1L

Meanwhile, Winchester is awaiting a stabilised flow rate in White Hat 39#1L as this well continues to flow back fluid following fracking of the Strawn formation.

White Hat 39#1L is to the west of White Hat 38#3ML and lies outside of the Mustang prospect.

The company completed fracking operations in late April with 1,200bbl of fluid recovered to-date.

However, the well encountered mechanical problems once it was placed on pump, possibly as a result of the frack sand flow, Winchester reported.

To-date, 124bbl of oil has been recovered.

Mr Henry said pump results from the well, along with initial swabbing results from the Mustang wells, were still encouraging “in that oil is present and being recovered”.

Winchester said it plans to inform the market once final consistent flow rates are established.

Danica has extensive experience writing and editing business news in the Oceanic and Southeast Asian regions. She has written across a range of industries including oil and gas, mining, energy, science and research, retail and travel. Danica has covered small and large cap companies listed on the Australian, Singapore, Hong Kong, Indian, London and Toronto exchanges.