Texas oil and gas operator Winchester Energy (ASX: WEL) reports that a reserves and resources audit places its total proved, probable and possible (3P) reserves at 495,800 barrels of oil equivalent (boe).
That is broken down to 383,900bbls of oil and 671.8 million cubic feet (mmscf) of gas.
In its announcement, Winchester notes the audit “confirms the prospectivity and viability of Winchester’s Texas holding and underpins the company’s forward plans”.
The company has also announced that its upcoming 2021 work program will test “a number of material prospects” and take advantage of the recovery in oil prices.
Winchester describes itself as having a single focus on oil exploration, development and production in the Permian Basin of Texas.
It has established initial oil production on its large 17,560-acre leasehold position on the eastern shelf of the Permian Basin, the largest oil producing basin in the United States.
Details on 2021 work plan coming soon
The company is currently undertaking development work at the newly discovered Mustang oilfield.
The report on reserves and resources was compiled by Texas-based Mire Petroleum Consultants.
Winchester chairman Laurence Roe said, after a challenging 2020 in the oil sector and following a review of technical assets, the company is pleased by the results of the audit along with 11.1 million boe in combined “best estimate” contingent and prospective resources.
“The company will soon release more details regarding its proposed 2021 operational program, which I believe reflects an attractive balance between risk and reward,” he added.
Prices up, costs down
Winchester said it has seen a resurgent oil price coupled with reduced operational and overhead costs in recent months.
In January, the company reported its average price per barrel in the December quarter was US$37.81 (A$48.78/bbl).
Gross oil production of the wells for the December quarter was 23,206 boe, of which 17,184 boe was Winchester’s share of output.
To 31 December, Winchester’s Permian Basin wells in Nolan County, Texas, have produced a total gross of 520,653 barrels of oil and 268 mmcsf of gas.