Winchester Energy to restart exploration and development across Texan oil leases

Winchester Energy (ASX: WEL) is poised to restart exploration and development at its Texan leases including drilling the Bast Deep prospect, followed by more drilling in the Mustang oil field and a workover program of existing wells.

The global COVID-19 pandemic triggered an operational hiatus for Winchester in 2020, which holds an extensive lease position in the East Permian Basin.

Field operations are now ready to start in the current quarter, with the initial program to extend into the September quarter.

The program involves a “high-impact” exploration well at Bast Deep, which has a upside gross prospective resource estimate of 2.34 million barrels of oil equivalent.

Planned drilling at Bast Deep will also hit the productive sands from the Bast Field and test Cambrian sands and overlying formations.

The well’s planned depth is 7,700 feet and is estimated to cost about US$800,000 to complete.

“Success at Bast Deep will not only add to Winchester’s existing production, reserves and cash flow, but a Cambrian discovery here will confirm the viability of the play type and likely lead to a priority program to test Cambrian prospects at Meteor and El Dorado, with combined P50 and P10 gross prospective resources of 3.3Mmboe and 8.21Mmboe respectively,” Winchester chairman Laurence Roe said.

Mustang Field and workover plans

In addition to Bast Deep and potentially Meteor and El Dorado, Winchester’s exploration plans include development drilling at the Mustang oil field in July along with workovers at producing wells.

During the September quarter, Winchester will undertake the WHR 21-06 well, where drilling is planned to target the Fry Sand in the south-eastern section of the Mustang field.

The well’s planned depth is 7,200ft and is estimated to cost US$700,000 to complete.

Meanwhile a review of Winchesters existing wells has pinpointed low-cost opportunities to grow production and cash flow.

The workover program will include completed Bast #1 for production in the Upper Cisco Formation with operations already started and estimated to cost US$120,000.

Over at the McLeod 17-03 well, a workover is also planned to fracture stimulate the producing Upper Cisco sands.

Winchester’s analysis of production at McLeod indicates the sands are tight and that fracture stimulation should improve overall production.

The company expects a successful workover of both wells will pay out within four months. Workovers are also planned at Bast A#1 and WHR 39-01.

Resources and reserves provide solid foundation

Last month, Winchester released updated resources and reserves for its holdings.

The latest estimate confirms 3P reserves of 495,8000boe net to Winchester and an upside P10 combined gross contingent and prospective resources estimate of 32.7Mmboe.

Mr Roe said the updated estimate “provides a solid foundation” for Winchester’s continued growth.

As part of this, Winchester is currently planning its exploration and development program for the September and December quarters.