Burleson Energy (ASX:BUR) is set to drill a prospective oil and gas target in Heintschel field area in Texas, USA, where a distinctive seismic anomaly suggests a high quality Wilcox sand reservoir.
The target's significance became more apparent following positive results of five nearby wells drilled on very similar anomalies.
The near field anomalies cover smaller acreages, and have produced at initial rates of up to 400 barrels of oil per day and 800 million cubic feet of gas per day.
One of these wells produced 40 thousand barrels of oil and 800 million cubic feet of gas within its first 100 days, which represents revenue of around $7 million in that time.
The company's technical team and operator, AKG, believe that the 135 acre anomaly could be indicative of the presence of a better quality reservoir than seen elsewhere in the field to date.
Burleson has resolved to prioritise this target, and is now in the process of securing permits and mobilising a drill rig.
A vertical, unfracced well will be drilled at a total cost of around $2 million.
Burleson holds a 50% working interest, $2.5 million in cash and monthly income from five producing wells, and thus ample balance sheet capacity for this initiative.
If the first well is successful, there are at least 2 more "sweet spot" drilling locations on the 135 acre anomaly that will be pursued.
Burleson is capitalised at just over $6 million, so the potential upside appears interesting.
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