Legend Oil and Gas, which has some choice blue sky potential via their 1,040-acre Piqua Project in Woodson County, Kansas, as well as roughly 200 BOEPD production through extensive oil and gas properties up in British Columbia, was pleased to report today that they have wrapped drilling on the first four wells at Piqua, as part of their 2013 operations in what is a larger, multi-well drilling program.
Three of these wells have also been completed for production and are now, much to the delight of management, flowing at rates far exceeding initial estimates. LOGL is pulling down an average of 14 BOEPD (4.67 bbls/day per well) with no water over the first four days of production and these results roundly confirm the company's vision for the project, which consists of remediation, expansion, and cost controls designed to optimize acreage potential.
Since acquisition by LOGL in later October of 2010, Piqua has seen a good deal of work done and the exceptional production rates on these latest wells has really bolstered confidence regarding development of the property, with the 320-acre Pat Collins lease/Squirrel reservoir of particular interest. The company is targeting as many as 40 more wells at a 2.5-acre spacing on the lease (which previously had only four wells) and has already begun permitting the next four targets, with tentative spud dates set for early this October.
That fourth well they just drilled ran into some technical snags, with a mechanical issue severely impairing the frac job, but LOGL is quite undauntedly, already slated for a remedial completion of the well given how good the results of the other three have been. Drilling success rate has been nearly 100% across the leases thus far and LOGL is looking at around 150-200 BOEPD on full development, with multiple opportunities to increase acreage and thus maximum development potential. The company is also looking to enhance water flood capacity for certain areas of the producing formation, improving the long-term recovery economics and stabilizing overall production rates at the same time.
Industry veteran with over three decades under his belt and President of LOGL, Marshall Diamond-Goldberg, proudly spoke of the company's success in bringing the first spate of wells in their 2013 drilling program for Piqua on line before the end of the month, despite weather delays for the first half of August. The first returns on the completed wells were mainly frac water, but once the cover water was out, these babies went 100% oil at rates nearly double the initial target, bowling over the field team and clearly indicating that increased water flood capacity at Piqua will lead to the anticipated productivity improvements.
LOGL intends to overhaul the logistics in general as well, working with lessors to consolidate production facilities while upgrading hardware to slash downtime and profit bleed. The company has a ton of blue sky potential here and a stable footprint up in Canada as the perfect backdrop. For example, major upside development on their Wildmere Unit interest (25 BOEPD heavy oil) with the operator, Husky Energy, could double production and even lead to the development of an entire additional Unit. The Berwyn (3.2k acres producing 100 MCF/day, or 17 BOEPD) and Grimshaw (major undeveloped potential similar to Berwyn) properties in northwestern Alberta, as well as the Medicine River (3,046 acres producing 255 MCF/day and 2.5 BOEPD, or roughly 45 BOEPD) site in west-central Alberta are some major vectors to keep an eye on for LOGL, with the gas-rich Joarcam property (40% WI in 6.4k acres, area has produced 55M bbls to date) in mid-east Alberta and Clarke Lake property (5.5k acres, interests in the block ranging from 9.37% to 25%) in British Columbia also being of significant importance to investors. The company has a roughly 50 BOEPD grab bag of smaller, mainly oil properties in BC/Alberta as well, with the Inga Sand Play being particularly attractive due to a 90% WI, Inga Unit production directly to the north, and a low-risk vertical well strategy that has proven feasible.
For more info on Legend Oil and Gas, visit LegendOilAndGas.com
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