Winchester Energy targets Texas oil that previous explorers may have missed

Winchester Energy WEL ASX Three Fingers Shale well oil bonus sands
Detailed log interpretation has revealed three porous sands that may have been obscured by hot shale and not previously recognised.

Winchester Energy (ASX: WEL) is planning a “transformational” test of what it calls the Bonus Sands play within its White Hat oil well in Texas, United States.

The Three Fingers shale at the White Hat 3801 well contains a series of thin sandstones and sand laminations (the Bonus Sands) within a gross interval of 60 feet (18m).

“The detailed log interpretation reveals that three porous ‘sands’ of this unit may have been obscured by the hot shale and therefore not recognised by previous explorers,” the company said.

The Bonus Sands could have a lateral extent of between 5,000 and 7,000 acres (20.23 to 28.33sq km), which Winchester said could be “potentially transformational”.

Cheaper vertical production wells might be possible

Winchester said it expects the Bonus Sands may provide commercial production using vertical wells rather than the more expensive horizontal drilling technique.

Winchester Energy’s ground is located in the highly productive eastern shelf of the Permian Basin in Texas.

The cost of the Bonus Sands work is expected to be less than US$150,000 (A$206,000) because of greatly reduced service prices due to the COVID-19 downturn.

“Several other existing wells are also candidates for re-entry across the bonus sands play should it prove successful,” Winchester said.

The White Hat 3801 well was drilled in 2016 by Carl E Gungoll Exploration (CEGX), Winchester’s private well partner. While CEGX currently holds a 50% working interest, Winchester is currently negotiating to become the operator and 100% owner.

Winchester will be performing a high rate — 60 to 70 barrels per minute — slick water frac using 4,000 barrels of water to place 100,000 pounds (45,360kg) of total proppant into the formation. The work is scheduled to begin in October or November.

Region has long history of oil and gas output

The area in which Winchester Energy is operating has numerous productive units with a long-established history of oil and gas production.

In just over a year, the production base has been extended with two new production locations, Fry Sand in the Mustang oilfield and Cisco Sands in the Lightning oilfield.

In other developments, a workover rig has moved to White Hall 2004 well, originally drilled by the company in late 2019, targeting the Fry Sand. The program will test two sand units in the upper Cisco Sands after wireline logs indicated the presence of oil.

Meanwhile, White Hat 3902, shut-in during the recent oil price collapse, has now been brought back online, producing 45 barrels of oil per day on its first full day of production.

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