Winchester Energy (ASX: WEL) will re-enter an existing oil well, White Hat 2004, by the end of the week and re-complete it for production from a previously untested zone.
The company is also moving to take advantage of an improving gas market by connecting four existing oil wells to gas production.
Winchester Energy’s ground is located in the highly productive eastern shelf of the Permian Basin in Texas. Wireline interpretation of White Hat 2004 has indicated an interval of 35 feet (10.7m) of net oil play with an average 13% porosity.
“At US$75,000 ($105,750), the re-entry and re-completion of White Hat 2004 represents an attractive opportunity to increase existing oil production at minimal cost,” the company stated.
Designs for further work at existing wells in the coming months are well advanced as Winchester plans additional re-completions to test a number of different formations.
Meanwhile, four existing wells are to be connected to gas sales, further lifting revenues.
Oil producing wells White Hat 2005, White Hat 2006 and Arledge 1602 are to be connected for gas along with McLeod 1703 which is at present shut-in.
“Testing has previously confirmed that gas from these wells has a high associated liquids content, which attracts a premium price,” the company said.
Payback from first well in 14 days
Tie-ins to the gas sales line will begin this week at McLeod 1703 this week at an estimated cost of US$5,000. During testing, this well flowed gas at a rate of 100,000 cubic feet (mcfpd) per day.
With the high-quality gas attracting a premium price of between US$4/mcf and US$5/mcf, payback is expected within 14 days.
White Hat 2004 was drilled in late 2019. The new program will perforate and test the Cisco Sands at a depth of 4,400ft.
Depending on the presence of oil, the 35ft interval may also be fracture stimulated before being brought into production.
The Cisco Sands have been a significant oil producer in the region with Winchester also currently producing oil from this interval at Arledge 1602.
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 a new producing interval in the Fry Sand in the company’s Mustang oil field and with new Cisco Sand production in its Lightning oil field.
Winchester has previously reported that the Mustang Field continues to perform and, so far, recently drilled wells have produced more than 137,000 barrels of oil.
A new well, White Hat 2006, came online in the March quarter.