Baraka Energy and Resources (ASX: BKP) and PetroFrontier Corporation (CVE: PFC) will soon know how well the Arthur Creek Formation shales in the Southern Georgina Basin compares to North America’s highly productive Bakken Shale.
A multistage open-hole completion string has now being run in the 1080 metre horizontal section of the Macintyre-2H well and fracture stimulation is expected to start in about three to four weeks once the coil tubing unit and service rig arrives on site.
The same equipment will also complete and test PetroFrontier’s Owen-3 and Baldwin-2Hst1 wells.
Unconventional potential and Statoil entry
The JV had significant early success in EP 127 last year with the MacIntyre-2 well reporting elevated hydrocarbon shows throughout the target Basal Arthur Creek “Hot Shale” formation with sustained and peak levels generally two to three times greater than those seen in the vertical pilot hole at Baldwin-2Hst1.
Adding further to its prospects, PetroFrontier choose to drill the horizontal section to 1080 metres, more than double the 501 metres it was required to under the farm-in agreement, without any added commitment from Baraka.
A success in MacIntryre-2H is also likely to draw Norwegian state oil company Statoil’s attention to EP 127.
While Statoil’s farm-in to PetroFrontier’s acreage includes EP 127 and EP 128, which Baraka holds 25% working interests, the successful flow of oil and gas will ensure the two permits get their fair share or more of its proposed exploration work commitment, which could add up to US$210 million ($A205.7 million) over the next 4-5 years.
Throughout this farm-in period, Baraka will be part of all decisions made, in relation to expenditures, to its 25% interests in both EP 127 and EP 128. It will also pay for its share of costs in the permits and the 75% stake it holds in the 75 square kilometre area around the Elkedra-7 well in EP 128.
Baraka has already made its first nominal contribution towards the completion cost for MacIntyre-2 and has enough funds to meet future contributions on its completion and the proposed seismic program that will be shot before the end of this year.
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