Canadian junior oil and gas company Nextraction Energy Corp. (CVE:NE) said Thursday that it has boosted its leasehold position in its Provost Viking oil pool in Alberta by almost double, and reported a ten-fold increase in production from its first vertical well frac.
The company acquired one section of 640 acres, at a 100% working interest, for $701,584, and one section of 320 acres, at 50% working interest, for $401,088. Nextraction’s net acreage position in the Provost Viking area has therfore increased from 1,040 acres to 2,000 acres.
The two acquired sections, which are adjacent to each other, are one mile from the company's existing fifty-fifty joint venture acreage, allowing for the potential to use existing infrastructure, Nextraction said in a statement.
Nextraction said the acquisition of the properties doubles its “drilling inventory of horizontal locations” to 36 wells. The company has identified 21 locations on 400 meter spacing and could drill at least four wells, owning a 100% interest, and own a 50% interest in 17 locations, resulting in a further 8.5 net wells.
Additionally, a further 15 locations may be drilled at a 50% interest, or 7.5 net wells, should down spacing be warranted.
The acreage is also prospective for light oil production from the Dina formation, about 150 meters below the Viking formation. A historical well on the land produced 18 million barrels of oil from the Dina formation, said Nextraction.
"We believe the acreage to be very prospective for a multi-well development program and will expand our ability to focus on developing the Viking formation for value added reserves,” said Nextraction CEO, Mark S. Dolar.
“Our experience and expertise in developing the Viking sand by horizontal drilling and multi-stage fracturing, we see this project as an excellent way to add significant oil reserves as we move towards our goal of being 80% light oil weighted by the end of this year."
Separately, the company said it successfully finished the re-completion of a well on its existing acreage, which had not previously been fracture stimulated. Prior to re-completion of the well in mid-June, it produced three barrels of oil per day and is now currently producing 29 barrels of light oil per day, a ten-fold increase. Payout is projected at three months.
The company is encouraged by the results of the frac as it confirms the high productivity potential of its acreage, Nextraction said in a statement.
The well, which has been producing for two years, is situated between two other wells that have cumulatively turned out 520 million barrels to date and continue to produce 20 barrels per day.
Presently, Nextraction is drilling its first horizontal well in the pool offsetting these wells and plans to multi-stage fracture its first horizontal well in the Viking Zone in the ensuing days. The company also plans to drill a second horizontal well on its joint-venture acreage by the third quarter this year.
Nextraction shares rose 60 cents, or 7.32% to trade at $0.880, in late afternoon trade.