Drilling Success on Second Horizontal Well
Sydney, Nov 22, 2012 AEST (ABN Newswire) - United States focused oil & gas producer AusTex Oil Limited (
ASX:AOK) (OTCQX:ATXDY) is pleased to update shareholders on its continued well development program at the company's 100% owned 5,500 acre Snake River Project in Kay County, Oklahoma.
Hod #19-1N Well
The company has received confirmation from Range Production Company, a subsidiary of Range Resources Corporation (RRC:NYSE), that drilling operations at the Hod #19-1N Horizontal well have been completed and that production testing is to commence. AusTex holds an 8.4% Working Interest and 6.7% Net Revenue Interest in the Hod #19-1N well.
The well reached a Total Measured Depth of 9,301 feet including a 4,000 foot lateral section through the Mississippi Lime interval. Logs and samples have confirmed the presence of Hydrocarbons across the length of the lateral.
A 20 stage hydraulic fracture stimulation has been completed successfully and the well has been fitted with an Electric Submersible Pump. Production testing has commenced and further updates will be provided in coming weeks.
The Hod #19-1N well is the first of up to three wells to be drilled in Section 19 Township 25 North Range 1 East on the western side of the Snake River Project and is located directly north of the successful Balder #1-30N. Additional Horizontal well participation opportunities are being pursued. (see map below)
AusTex Executive Chairman Richard Adrey commented: "We are extremely pleased with the Range Resources team and their progress on this well to date. They have again demonstrated their expertise in this area with an impressive 19 days from spud date to turning the well over for production testing.
Range Resources are modeling these Horizontal wells with a cost of $US3.4m and an Estimated Ultimate Recovery of up to 600,000 Barrels of Oil Equivalent with 70% liquids. Based on these numbers the wells have an NPV of $US7.1m and show an Internal Rate of Return of ~100% with current spot commodity pricing.
Additional Horizontal wells are planned with Range Resources in the coming months and along with our ongoing successful vertical well program we are planning to increase our oil and gas production significantly during calendar year 2013.
About Australian Oil Company Limited
Australian Oil Company Limited (ASX:AOK) (OTCMKTS:SGCSF) is an Australian-based energy company focused on under-explored, recently over-looked, world class oil and gas opportunities near under-supplied markets. The Company is currently focussed on conventional oil and gas exploration and production in the Sacramento Basin in California. Australian Oil has a portfolio of natural gas and oil producing wells in addition to prospects and discoveries at various exploration and appraisal stages. AOK is in the process of evaluating the acquisition of oil and gas producing and exploration assets to enhance the Company's strategic needs and deliver shareholder value.
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