20th May 2019 14:08
LONDON (Alliance News) - Reabold Resources PLC on Monday said the perforating and swabbing operation at Burnett 2A and Burnett 2B wells located in the US state of California has completed, with commercial flow rates confirmed at both wells.
Reabold said these wells are the third and fourth in its Reabold California portfolio to achieve commercial flow rates. Multiple zones were perforated in Burnett 2A and 2B, with swabbing runs resulting in oil flow from all zones predicted to be hydrocarbon bearing.
Pumping units will be mobilised this week and while permanent production facilities will be in place in the next two weeks, at which point both wells will be in permanent production. The flow rates from the wells will be reported once permanent production begins.
Reabold is intending to drill more wells in the Monroe Swell licence area, where the two Burnett wells are located. Reabold has also now earned its 50% working interest in Monroe Swell and "all future activity will be funded by Reabold at a 50% paying interest".
Elsewhere in California, Reabold is awaiting an encroachment permit from the California Division of Oil, Gas & Geothermal Resources for the VG-4 well at the West Brentwood licence. The well has been shut in while the final stage of works is finished.
At the Doud A area in Monroe Swell, production is "curtailed by water ingress at the main production well" as a result of a casing leak. A minor workover is planned.
From April 20 to May 8, cumulative gross production from Reabold's California portfolio was 7,484 barrels of oil equivalent gross, of which 3,742 barrels were net to Reabold. This excludes volumes from testing at Burnett 2A and 2B.
Reabold Chief Executive Sachin Oza said: "We are very pleased to be able to confirm that all four wells drilled in the California portfolio will soon be in permanent production. Flow rates at Burnett have been increasing throughout the testing period as the swabbing takes effect, and we look forward to seeing the sustainable flow rates once the pumping units are in place. In the meantime, we have produced and are selling meaningful volumes out of our existing wells, with the cash flow allowing us to continue to exploit Monroe Swell and West Brentwood to drive considerable, self-funded growth from these assets. With VG-4 soon to be on unconstrained flow, the two Burnett wells coming into production, and the restoration of full production at Doud A, we should see a sharp increase in production in the near term, with additional drilling to follow.
"Meanwhile, operations are progressing well at West Newton in Yorkshire, and we look forward to receiving initial results shortly."
Shares in Reabold were up 1.5% at 0.68 pence on Monday afternoon.
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