Annual Report to shareholders
Sydney, May 1, 2012 AEST (ABN Newswire) - AusTex Oil Limited (
ASX:AOK) is pleased to provide its Quarterly Activity Report for the quarter ended 31 March 2012.
Highlights
- Mississippi Lime play recognised as World Class Reservoir Play
- Mid Continent USA home to a new oil boom - International Oil returns to the Midwest
- AOK adds Strategic Acreage to Portfolio
- First Mississippi Lime production achieved
- Agreement for funding in place to continue production growth
Mississippi Lime recognised as a World Class Reservoir Play
The past year may well be remembered in the US oil industry as the coming of age of the Mississippi Lime play. Following on from the success of horizontal drilling and modern hydraulic fracturing techniques in known shale plays, a new wave of exploration and development has gathered momentum in the Carbonate reservoirs. Industry leaders now believe the Mississippi Lime to cover 17 million acres across Northern Oklahoma and into Northwest Kansas at a depth of less than 6,000 feet. With 70% of production comprising liquids, the play is now recognised as one the leading unconventional plays in the country.
A year of Transition
For AusTex, 2011 was a year of transition. Having targeted shallow opportunities in the Pennsylvanian age reservoirs near Tulsa with mixed success; AusTex's management put a hold on drilling and refocused efforts on acquiring acreage in the core area of development of the Mississippi Lime Play near Tonkawa, Oklahoma. NYSE listed Range Resources Corp (NYSE:RRC) was in full scale development targeting the Mississippi Lime.
AusTex now holds 22,500 net acres in the Mississippi Lime Play defined area of interest which has been acquired at a very competitive cost per acre.
The company's is focused on the exploration and development of the following projects:-
Snake River Project - 5,500 acres
Northern Oklahoma
AOK 100% Working Interest (WI) 81.25% Net Revenue Interest (NRI)
AOK now holds a 100% working interest in 5,500 acres in the Snake River Project. Development drilling on the project commenced in the December Quarter 2011 with success in the ETU#14-5 and ETU#15-4 vertical wells. Both wells intersected over 300 gross feet of the target Mississippi Lime interval and were completed for oil production. Thirty day Initial Production rates of 50 boe/d and 90 boe/d respectively were reported. Additional wells are to be drilled on the project in the coming months with the ETU #17-6 underway with a rig contracted to drill three further production wells and one new Salt Water Disposal Well.
At the time of this report, the first Horizontal Well drilled at Snake River was under completion for production. This well was drilled under a participation agreement with Range Resources Corporation (NYSE:RRC). A significant amount of reservoir data was acquired from this low risk entry into horizontal development. This information and the success of this well have provided a valuable insight into the potential of the Snake River Project.
Kansas
AusTex Oil and Castle Resources Inc., as operator, are working interest partners under a Joint Operating Agreement in oil and gas leases in Ellsworth, Rice, Sheridan and Thomas Counties, Kansas.
Cooper Project - 11,600 acres
Sheridan County - Kansas
AOK 53% WI 38% NRI
During 2009 a 26,500 acre seismic acquisition program was completed across the Cooper Project in Sheridan County. Clark #1 Well and two other producing wells were completed for production in the Lansing-Kansas City Lime formation. In order to increase the success ratio, TameCat LLC, of Oklahoma City was engaged to reprocess the seismic. By using electronic logs from the wells drilled and their unique methodology using both geophysics and petrophysics, numerous high-graded targets have now been identified within 11,600 acres of the project area. Lease extensions have now been finalised on the underlying acreage. Additional drilling is scheduled on this project during 2012.
Colby Project - 15,500 acres
Thomas County - Kansas
AOK 70% WI 58.8% NRI
In recent months, the company has announced the acquisition of an additional 15,500 acres in Thomas County which is located west of the Cooper Project. A 3D seismic shoot has now been completed on the acreage with the data collected sent for processing under the supervision of TameCat LLC. Target formations, in addition to the Mississippi Lime, include the Toronto, Lansing Kansas City, and Arbuckle formations. Further development drilling is to commence shortly.
Ellsworth Project - 3,200 acres
Ellsworth and Rice Counties - Kansas
AOK 50% Working Interest 38% Net Revenue Interest
The Ellsworth Project is located on the Central Kansas Uplift in an area renowned for historical oil production from the Arbuckle Formation. Drilling on the project is targeting additional breaks in the formation at depths of less than 3,500 feet. There are currently two producing wells on the project, the most recent success being the Ludwick #1. During drilling operations a successful one hour drill stem test was conducted on a 51 foot interval at 3,237 feet which resulted in 19.29 barrels of oil.
The well is now in production and additional development wells are scheduled.
2.2 The Future
During February and March 2012, the Company announced additional capital initiatives which are subject to shareholder approval at the Company's forthcoming Annual General Meeting. The funds will be used to continue the development drilling on the Snake River Project as well as exploration and development on our Kansas projects. By securing strategic acreage in the defined Mississippi Lime area the Company will continue to develop the acreage with the goal of increasing oil and gas production.
To view the complete AusTex Oil Quarterly Report, please refer to the following link below:
http://media.abnnewswire.net/media/en/docs/ASX-AOK-676863.pdf
About AusTex Oil Limited
AusTex Oil Limited (ASX:AOK) (OTCQX:ATXDY) is a Public Company listed on the Australian Securities Exchange (ASX) and the OTCQX.
AusTex is focused on exploration and development of oil and gas leases in the USA. The company produces oil and gas in Oklahoma and Kansas and is currently developing producing leases in both states with interests in 11,600 net acres of oil and gas leases in the Mississippi Lime Play. The Company has net production of circa 800 boe/day with Independent 1P reserves certified at 3.505 Million BOE with NPV10 of US34.8 million as at 31 December 2015.
US operations are based in Tulsa, Oklahoma, with an office at 1801 East 71st Street. International Energy Corporation (Oklahoma) is a wholly owned subsidiary and a licensed oil and gas operator in Oklahoma and Kansas.
| ||
|
