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Northcote (LSE:NCT), an onshore US oil and gas exploration and production company, has commenced work on the Moursand A-2 well, in the Little Drum Unit in Osage County, Oklahoma in which Northcote has an 51.75% working interest and 75.1% net revenue interest. This project will complete the targeted four well fracture stimulation programme planned for 2013 with fracture stimulation of up to six additional wells targeted for 2014.
Highlights:
• Fourth frac commenced at Moursand A-2 and expected to complete within 5-7 days
• Burkhart #1 to be completed in the Mississippian
• First new well expected to spud in January at Mathis Unit where sell down of interests is proceeding as planned
Northcote CEO Randall Connally said, “We continue to make excellent progress in implementing our stated portfolio development strategy, bringing more wells into production, acquiring additional acreage and securing development partners. We are excited about the fracture stimulation of the Moursand well, following the success of the acid frac on the West Little Drum well, which continues to produce at 40 gross barrels of oil per day. Our technical staff made a compelling case for adding the well to the programme, given the oily nature of historical production, and the ability we now have to handle the additional oil and salt water production resulting from completion of the Little Drum pipeline project this summer.”
“We are pleased to be completing Burkhart #1 in the Mississippian and adding it to our inventory of producing wells. This will dovetail with our first operated well on Mathis, which is a high impact new drill well in a proven oil field that has produced over 1 million barrels of oil. The 3-D seismic validates the location as being in the best reservoir rock in the formation.”
The intended work programme for the Moursand A-2 will include a recompletion and acid fracture stimulation of the well bore and is expected to be finished in 5-7 working days. The well, which is a vertical well bore, has been shut-in since prior to its acquisition due to water disposal constraints at the Little Drum Unit. These constraints have been alleviated following the completion of the Little Drum water disposal pipeline in summer 2013. The inclusion of this well in the frac programme is significant as it was not evaluated in Northcote’s reserve reports and represents potential reserve and production additions. The Company expects to complete the work prior to year-end 2013 with results expected in mid-to-late January 2014.
Additionally, Northcote and its working interest partners have agreed plans to complete the Burkhart #1 well in which Northcote has a 3.69% working interest and 2.77% net revenue interest. This well was previously deepened to test the Arbuckle formation but water saturation prohibited completion in that zone. Subsequent analysis has suggested that the well may be completed economically and produce from the Mississippian formation.
The first new well location the Mathis project has now been permitted and the surface location prepared for commencement of drilling operations. Drilling is expected to commence early in 2014 after Northcote has finalised agreements with all of its working interest partners. As previously announced, Northcote intends to sell down interests in the Mathis Unit and the Company expects to complete the targeted sell down in the near future.
