7th Apr 2016 08:42
LONDON (Alliance News) - Frontera Resources Corp Thursday said it has completed its four-well drilling programme on the South Kakheti gas complex that will be used to design the next phase of drilling, stating the early indications show previously non-producing wells have been stimulated successfully.
The company has conducted the drilling programme under the complex's Oil Window initiative in Georgia, and will assist the company in designing the large-scale exploitation of the oil within the central portion of the complex.
Separately, Frontera said it has also issued shares in order to settle fees for services being provided by service providers, including the ongoing operations covering workover, drilling, logging, completion and transportation services.
"Early results from these operations have demonstrated that the company's most recent well-completion designs have provided successful reservoir stimulations to wells that were not able to previously produce. In addition, in the case of a producing well, existing production has been successfully increased by a factor of approximately five times," said Frontera.
The T-33 and T-36 wells, which were drilled back in 1979 and abandoned after being considered dry holes, have been successfully stimulated and are now achieving production of around 15 to 20 barrels of oil per day from each well.
Although that is a small amount of production, it is being derived from wells that have never produced oil before.
Frontera believes the production from those two wells "can be increased significantly" by increasing the amount of stimulation.
The existing producing well at the project, Niko-1, was also stimulated and has now increased production to 80 barrels of oil per day from the previous 15 barrels per day, and Frontera believes this can also increase significantly through further, larger-scale stimulation work.
"With the addition of this most recent frac campaign to a larger database of wells that the company has fraced over time, technical results from campaign to campaign have demonstrated a successful learning curve that the company believes is the basis for large-scale development. With this in mind, the next related frac campaign is anticipated to commence within the next 90 days," said the company.
Frontera plans on drilling 175 wells on the central portion of the licence in order to exploit the oil in place of 680 million barrels of oil, with that four-well programme providing the basis for that huge upcoming programme.
In regards to the fees to be paid for by shares, Frontera said it has issued 120.0 million new shares to pay for the procurement of USD750,000 worth of services covering workover, drilling, logging, completion and transportation services, which are still ongoing.
Those shares represent around 3.1% of the company;s enlarged issued share capital.
Frontera shares were trading down 7.4% to 0.477 pence on Thursday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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