Winchester Energy to target Wolfcamp shale at Thomas Ranch

Winchester Energy ASX WEL Wolfcamp shale Thomas Ranch oil gas
US Energy Corporation of America has re-entered Thomas 119-1H and plans to test the Odom Lime member of the lower Strawn Formation and then frack the Lower Penn shale of the Wolfcamp ‘D’ formation.

Winchester Energy (ASX: WEL) is getting busy in Texas, as the exploration and development programs planned across its Permian Basin acreage ramp up.

The US-focused oil and gas junior today announced its Thomas 119-1H well in the Thomas Ranch oilfield has been re-entered by private project partner US Energy Corporation of America.

The plan is to test the Odom Lime member of the lower Strawn formation before moving up-hole to undertake a fracture stimulation program on the unconventional Lower Penn shale in the Wolfcamp D formation.

At the end of last week, Winchester also reported oil flows from its White Hat 39#1L well ahead of a planned fracking program.

These are just two campaigns included in a schedule the company had recently outlined for the rest of the year and early 2019.

Wolfcamp D shale potential

The Wolfcamp D shale is a known oil producer on the Permian Basin’s eastern shelf and Winchester believes it is present across some 15,000 acres of the company’s leasehold.

According to a 2016 assessment by the US Geological Survey, the Wolfcamp shales in Texas’ Midland Basin (within the larger Permian Basin) hold an estimated mean of 20 billion barrels of oil, 16 trillion cubic feet of associated natural gas and 1.6 billion barrels of natural gas liquids.

The Thomas 119-1H well was first drilled and completed in 2014 by previous operator CraRuth Energy Corporation, with Winchester earning a 50% working interest.

Well logs run after the vertical pilot hole was drilled had indicated two zones of potential oil pay in the Lower Penn shale of the Wolfcamp D formation.

However, CraRuth chose to drill a 2500-foot horizontal well bore in the Ellenburger formation, which unfortunately produced non-commercial oil volumes.

The current fracking program and planned production testing activities at Thomas 119-1H will initially target the unconventional potential of the Lower Penn shale that overlies the Strawn and Ellenburger formations.

In the event of successful oil and gas production from the well, Winchester has the right to a 12.5% working interest back-in following the US Energy Corp’s recovery of all costs associated with completion activities.

According to Winchester managing director Neville Henry, a successful result from fracking with “even a modest oil rate of 20-50 barrels of oil equivalent from a single-stage vertical frack over a 200-feet interval of the Lower Penn/Wolfcamp D formation…would be significant”.

“That translates into a much higher number in a 5000ft or longer horizontal well and this has the potential to re-rate the value of Winchester given the ubiquitous presence of these units throughout the company’s leasehold position and existing wells,” he said.

Exploration and development plans

In addition to Thomas 119-1H, Winchester’s string of drilling and production testing programs include the recompletion of the White Hat Ranch 38#3 and Bridgford 40 wells.

Meanwhile, a pump jack has been placed on the White Hat 39#1L well with the frack crew placed on standby, although Winchester said they “may be deployed depending on ongoing monitoring of flow rates”.

From November through to January, vertical drilling is also planned for three new prospects in the White Hat Ranch oilfield – El Dorado, Spitfire and Mustang.

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