Winchester Energy to spud new Lightning prospect well in Texas

Winchester Energy ASX WEL Lightning prospect oil gas drilling
Winchester Energy is about to spud a new well at the Lightning prospect targeting the Cisco sands, a proven producer in Texas' Permian Basin.

Onshore oil producer Winchester Energy (ASX: WEL) will start drilling a well next month at the newly defined Lightning prospect in its Arledge oil lease in Texas’ Permian Basin.

The US-focused company today announced the Arledge 16#2 well is due to spud in July and will target the relatively shallow Cisco sands, which is a proven producer in the basin.

The well has a planned total depth of 5,500ft (1,676m) and is expected to satisfy leasehold drilling commitments, which will extend Winchester’s Arledge lease for a further year.

Lightning prospect

Winchester has a 100% working interest in the Lightning prospect, which has a gross prospective resource best estimate (P50) of 1.95 million barrels of oil in the lower sand lobe within the Cisco formation.

According to Winchester, the Cisco sands have historically produced more than 5 million barrels of oil and 2.25 billion cubic feet of gas, with around 100,000bbls of production coming from the Bast field, about 1.6km northeast of the Arledge 16#2 proposed well location.

The Arledge 16#2 well will test a 150ft (45.7m) section of potential gross oil pay with a net pay of 29%, the company said.

It has been designed to essentially “twin” the Arledge 16#1 well, which was drilled in 1982 and targeted the Ellenburger formation. According to wireline log data, this earlier well encountered 300ft (91.4m) of Cisco sand in two sand lobes.

The proposed Arledge 16#2 well will target the lower sand lobe, which is interpreted to have about 40ft (12.2m) of net pay, as interpreted by the wireline logs.

Drilling plans

In an investor presentation also released today, Winchester said it exploration drilling at the Spitfire and El Dorado prospects within its Permian Basin acreage was planned for the second half of this year.

Combined with Lightning, the three prospects have a total cumulative gross best estimate prospective resource of 7.7MMbbls of oil.

The company is also planning 24 wells across the Mustang prospect area within the White Hat Ranch as part of a new development strategy that follows the success of White Hat 20#3.

Thomas Ranch

Earlier this week, Winchester announced the flow of oil and gas following a successful vertical frack of the Thomas 119-1H well in the Thomas Ranch, north of the Arledge lease.

Winchester has the right to a 12.5% working interest back-in to this well, which is operated by private company US Energy Corporation of America (USEC).

Following the recovery of frack fluid, USEC reported the well producing an average of 29 barrels of oil and 450,000 cubic feet of gas per day over the last week.

The fracking operations were targeting a 100ft section of the Three Fingers shale within the Wolfcamp D formation, which extends across Winchester’s entire acreage holdings in the Permian Basin.

According to Winchester, the success at Thomas 119-1H bodes well for the company’s acreage and future potential, with the Three Finger shale now representing a “highly attractive target for horizontal drilling and fracture technologies”.

Winchester Energy managing director Neville Henry said it was “unusual to see this level of production from a vertical well”.

“It is similar to, or exceeds, the early test results in shales before the development of current horizontal drilling and fracture technologies,” he said.

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.