Abita Oil Prospect Acquisition
Highlights
- Acquisition of 20% of Abita prospect
- Abita prospect is targeting a resource of 1 MMBLS and 4.5 BCFG up to 2.3 MMBLS and 9.4 BCFG.
- Targeting multiple 7+ objectives over 2,400ft gross interval
- Extension to 8 MMBO field which is productive from all 7 intervals
- Well anticipated to spud in Late May/Early June and take 20 days to drill
Abita Prospect, Non Operator 20%WI (15% after payout)
The Board is pleased to advise that it has signed a Participation Agreement to acquire a 20% working interest in the Abita Prospect, operated by Clayton Williams Energy Inc (NASDAQ: CWEI) in Plaquemines Parish, Louisiana.
The prospect will be drilled to a total depth of 10,700ft TVD in a normally pressured section with the first objective levels expected at approximately 8,100ft. The most likely resource potential is 1 MMBL and 4.5 BCF gas with upside resource potential of 2.3 MMBL and 9.4 BCF gas. The well is expected to take 20 days to drill and is planned to spud during the current quarter.
The Abita Prospect is a multiple objective prospect as an extension to Coquillo Bay Field (produced 8 mmbls & 15 BCFG). The prospect is a down thrown drag feature defined by 3D seismic across a shallow syncline from the main field. The well will be structurally high to wells that produce to the south across the syncline.
If successful the well is likely to be dual completed and production rates are estimated to be between 200-400 bbls/d and 100-5,000mcfd depending on the sands producing. It is likely only one well will be required to drain the structure.
The Company’s share of the initial well costs is estimated at ~US$550,000 (includes entry costs). In a success case the Company’s share of completion and facilities costs are a further US$840,000. Due to the well being in a wet location, completion of facilities and commencement of production will take up to 7 months.
The entry terms are favourable with the Company paying 20% to earn a 20% working interest and following project payout GGE’s working interest will reduce to 15%. The net revenue interest being delivered is 74%.
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