Third Acquisition Completed - Workover Set to Commence

Source: 10/14/2020, Location: Not categorized

Brookside Energy Limited and Stonehorse Energy Limited are pleased to provide an update on the operation of the Orion Project Joint Venture (the Joint Venture). The Joint Venture is targeting producing properties and associated acreage Held by Production (HBP).

- The Joint Venture has executed a purchase and sale agreement for its third producing property acquisition, the Thelma 1-32 well, including the associated 40 HBP acres and existing infrastructure (the Thelma Well).
- The Thelma Well is located in Murray County in the southern part of the SCOOP Play, approximately 20 miles east-northeast of Brookside’s Jewell DSU.
- The Black Mesa team have identified a number of high potential target formations in the Thelma Well (a vertical well drilled in the early 1990’s) including material behind pipe volumes.
- This third acquisition (in less than four months) expands on the Orion Project’s scope and scale by adding virgin proved developed not producing (PDNP) reservoirs and their untapped volumes to future potential production.
- The footprint of the Orion Project has now been expanded to encompass a new area outside of the SWISH area of interest (AOI) with considerable upside potential from additional PDP acquisitions and/or development opportunities. - Workover operations are set to commence shortly with a rig expected to be moved on location early next month.
- Black Mesa continues to work up additional acquisition targets within the SWISH AOI and the wider southern Anadarko Basin area, advancing these opportunities and adding to the list of acquisition targets.

Commenting on the announcement, Brookside Managing Director, David Prentice said:
“We are once again delighted to bring news of another successful Orion Project Joint venture acquisition to our shareholders. This latest deal is another example of our teams’ ability to remain disciplined and focussed on returns and still deliver significant growth potential from the Producing Property Acquisitions pillar of our business.

“We are very much looking forward to providing further updates from this new and exciting AOI as we optimise production and further investigate the significant underdeveloped potential in the area.”

Stonehorse Managing Director, David Deloub said:
“As scale and holding acreage by production is the key to the Orion JV we are very pleased to announce a third acquisition within four months of the Joint Venture’s operation. In addition to providing several high potential targets in this well this also expands our footprint and establishes a new AOI in Murray County”.

The Joint Venture has successfully closed its third producing property acquisition opportunity (the Thelma Well) in its first four months of operation. The Joint Venture was formed in mid-June 2020 to target mature long-life production assets with very low terminal decline and upside that can be unlocked from remedial workover activity and/or unexploited or underexploited behind pipe or deeper productive zones.

The Thelma Well, which is located in Murray County, Oklahoma was drilled and completed in 1992 as a vertical well targeting the Simpson Group and was spaced on a 40-acre drilling spacing unit (DSU). The well is located approximately 20 miles east-northeast of Brookside’s Jewell DSU in the SWISH AOI in an area that can exhibit high oil production per unit with multiple discrete high porosity high permeability target zones.

The Thelma Well has produced approximately 57,000 barrels of oil to date which, based on the internal estimates prepared by Black Mesa, indicates that material volumes are still to be extracted from producing zones or behind pipe formations, making this well a prime workover candidate. Successful restoration of commercial production in the Thelma Well will establish a new AOI for the Joint Venture complementing the SWISH AOI.

Workover operations are set to commence shortly with a rig expected to be moved on location early next month. Workover operations will include inspection and repair or replacement of both surface and downhole production equipment as well as a “clean-up” of the perforated intervals to optimise the existing production. Future work will include adding further production and cashflow through recompletions of already identified behind pipe reservoirs that have produced in offset wells surrounding the Thelma Well.

The costs1 associated with the acquisition of the well and the workover will be met by the Joint Venture partners (50/50) in accordance with the terms of the agreement. The Joint Venture is continuing to work up a pipeline of opportunities. The Black Mesa team have already identified a large number of potential acquisition targets both within the SWISH AOI and more broadly in the southern Anadarko Basin region that satisfy the Joint Venture’s investment hurdles and work to advance these opportunities and add to the list of targets is ongoing.

Gulf Oil and Gas
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