Burleson Energy’s (ASX: BUR) key Texas horizontal drilling project has been given a vote of confidence by private Australian company Mogal Holdings, which is contributing US$2.76 million to the well cost.
The farm-in reduces Burleson’s financial exposure to the Truchard-2H horizontal well in Colorado County, Texas, and increases Burleson’s flexibility to pursue full development of its Heintschel gas-condensate field.
It also introduces a technically strong partner to the development of the Truchard unit.
At least 2 additional horizontal wells can be drilled with Mogal in the Truchard Unit, which covers 664 acres, or about 15% of the producing Heintschel field.
Mogal, which holds a 20% interest in Coogee Chemical’s Methanol plant in Laverton, Victoria, as well as other minerals and hydrocarbons interest, will receive a 30% working interest in the Truchard-2H and the Truchard Unit.
Quick gas and condensate sales targeted
The multi-staged gas-condensate Truchard-2H well targets 7 billion cubic feet of gas as well as 200,000 barrels of condensate.
Independent analysis by Integrated Petroleum Consultants had indicated that this production at current commodity prices would deliver total revenue of U$53 million (A$54.3 million) over the expected 10 year term of the well’s life.
Truchard-2H is expected to cost about US$6.3 million and is the first horizontal well drilled on the Heintschel field.
Drilling will be carried out in 3 phases with the near vertical section of about 3500 metres ; a horizontal section of up to 700 metres the Wilcox sandstone reservoir that will require a rig with a top drive; and a six stage fracture stimulation of the horizontal section.
Following this, the well be brought on production and generate wet gas and condensate sales. This will be facilitated by the proximity to the well of hydrocarbon sales and distribution infrastructure.
Proactive Investors is a market leader in the investment news space, providing ASX “Small and Mid-cap” company news, research reports, StockTube videos and One2One Investor Forums.