New Standard Energy (ASX: NSE) has reported that its US based operator and JV partner AKG Energy has completed preparations for the commencement of drilling of the Heintschel #1 – the first Wilcox prospect for the Colorado County Project, Texas, USA.
All site infrastructure and well permitting is complete and the Colorado County Joint Venture (JV) is now waiting for the drill rig to complete its current contract before moving to New Standard’s well.
Rig delivery is expected in early April and a contract has been secured by the JV for two firm wells with an option to drill a third well before release. A further update will be provided when the Heintschel #1 well has been successfully spudded.
New Standard Managing Director Sam Willis, said that initial success at the Brasher #1 well in February had provided the company with confidence in both its US operator and the quality of the 3D seismic acquired in late 2009.
“The US drilling program is targeted at drilling meaningful prospects with high rates of historical success, with controlled and modest drilling costs,” he said.
“Our initial commercial success at the Brasher #1 well has shown that these outcomes are readily achievable. The leverage available from drilling the Wilcox prospects is a major reason we acquired an interest in the Colorado County Project and we are eagerly anticipating the commencement of this next phase of drilling."
“Success from one or more of the upcoming Wilcox prospects provides the opportunity to generate substantial cashflow and reward for New Standard shareholders,” he added.
The Heintschel #1 (previously referred to as W1) is a lower Wilcox sandstone reservoir prospect that will be a vertical well drilled to a total depth of ~11,750 feet (~3,581 metres).
The Heintschel #1 to take up to 35 days to drill and complete and has the potential to contain 7.2 bcf of gas and greater than 100,000 barrels of condensate.
The Heintschel #1 is the second well of an initial six well drilling program planned for the Colorado County Project in 2010. New Standard has a 32.5% working interest in the Heintschel #1.
New Standard and its partners (US operator AKG Energy and Burleson Energy (ASX: BUR)) expect to immediately follow the Heintschel #1 with a second well at the W2 Wilcox prospect.
W2 is a much larger and slightly deeper lower Wilcox prospect that is analogous to a prolific production trend along strike in the neighbouring county, and has the potential to contain 100 bcf of gas and 2.4 million barrels of condensate. NSE has a slightly higher 36% working interest in the W2 prospect.
The production facilities and infrastructure are largely complete for the Brasher #1 well and it is anticipated that final tie in to the gas sales network will occur in the first half of April.
New Standard Energy shares rose 9% to 18 cents in trading today.
Disclosure: The author holds no positions in the company