The Board of Golden Gate Petroleum Ltd (ASX:GGP) is pleased to announce the initial production testing results from the Sugar Valley # 1 well. During the initial production testing while the well was cleaning up and displacing completion fluid, the initial production rate on a 14/64 inch choke tested up to a 3.2 million cubic feet of gas per day rate and a 31.2 bbls of 48 gravity oil per day rate.
A 36 feet interval was perforated and a gravel pack was completed prior to testing. The calculated open flow rate from the production test indicates a significant reservoir tank. The well is currently shut in while a short gas pipeline is installed to the nearest tie in point.
The Sugar Valley # 1 well was drilled to a depth of 12,750 feet and is located 60 miles southwest of Houston, Texas. The Sugar Valley # 1 well targeted a Vicksburg sandstone reservoir known as the Tex-2 formation and shallower Frio sandstone reservoirs.
The Bowtie prospect has been estimated by the operator to have prospective reserves at 30 billion cubic feet of gas on a high-side reserve calculation basis and approximately 540,000 barrels of oil assuming a gas oil ratio reported in a down dip well which produced from the same structure back in the early 1970s. It would most likely require three wells to produce the in-place high-side reserve potential of the Bowtie West Prospect.
Yarras Texas LLC, GGP’s wholly own subsidiary, is paying 13.3% of the drilling costs to earn a 12% working interest in the prospect.
The proposed Sugar Valley # 1 well is located structurally up-dip from the Bouldin-Picton No. 1 well, the key offset well for the Prospect. The Bouldin-Picton No. 1 produced 5,549 barrels of oil and 476,720 MCF of gas from a 46 foot Tex. 2 sandstone reservoir in the early 1970s. The well ceased economic production apparently due to sandstone flow into the well-bore. The Sugar Valley No. 1 well penetrated a seismic amplitude anomaly associated with the Tex. 2 sandstone updip from the Bouldin-Picton No. 1.
Geologically, the Sugar Valley No. 1 well is located in the heart of one of the most prolific oil and gas producing trends in Texas (see Figure below) where production is from the Miocene, Frio, Tex. 2 and Vicksburg Formations. To the southeast is the world class Old Ocean Field. As of September 2011, Old Ocean has produced over 4.50 TCF (Trillion Cubic Feet) of gas and 450 MMBO (million barrels of oil). To the northeast is Pledger Field that has produced 2.018 TCF of gas and 3.1 MMBO and Sugar Valley to the northwest that has produced 143 BCF (billion cubic feet) of gas and 36.1 MMBO.