With the start of appraisal drilling U.S. Oil & Gas PLC (USOIL) has reached a major project milestone and investors in the currently un-listed group will be keenly waiting for the results.
The past drilling at the Hot Creek Valley project unearthed a new oil discovery, though more work was needed to further define and progress the emerging asset.
On Wednesday afternoon, the explorer confirmed that the Hot Creek Valley project, in Nevada, was back in the drilling phase.
The new Eblana well aims to follow up a previously encountered oil discovery.
Eblana-3 well is described as an appraisal well. It is positioned ‘updip’ and around 1.2 kilometres from the Eblana-1 discovery well.
It is designed to “investigate reservoir and hydrocarbon characteristics”, the presently un-listed explorer said. Also, it is hoped that the well will prove up a portion of the company’s estimated contingent resources into proved reserves.
In the months leading up to the drill programme, USOIL has been supported with new investment. It raised US$1.15mln in March, selling 2.75mln to investors at the equivalent of 30p per share and more recently, in April, it raised a further US$290,632.
All eyes on Eblana
Eblana-3 will be a vertical well and, according to the well plan, it will be drilled down to a depth of 7,000 feet, although the company said drilling could continue deep in order to penetrate Palaeozoic zones.
Rig operations are expected to last up to 45 days.
Once the Eblana-3 well results are in, the company will make a decision about its plans for the subsequent drilling – in this regard it said that the proposed Eblana-6 well location is some 1.4 kilometres from Eblana-3, and the pad is already in place.
Hopes to de-risk the project
“We are pleased to have commenced drilling operations at Eblana-3,” said Brian McDonnell, USOIL chief executive.
“On behalf of myself and the board, I would like to thank our operations team and our drilling contractor Capstar Drilling for their efforts in achieving this milestone with exemplary efficiency.
“As with any well in a new basin, the drill carries risk, but we believe that our intensive programme of data collection and modeling has reduced that risk as far as is possible.
“We look forward to updating shareholders on drilling results in due course.”