G2 Energy Corp (CSE:GTOO, OTC:GTGEF) announced early results from the optimization plan ongoing at its Masten Unit property in Texas.
Preliminary October production volumes reached their highest level since G2 acquired the Masten Unit on June 1, with gross volumes above 2,000 barrels of oil per month. That’s approximately 200 barrels higher than any previous month, the company said.
The optimization plan includes three components: focused water injection, a hot oil program to remove flow-restricting impurities and gas flowline cleanouts.
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The first component of the plan is to ensure water is targeted for injection to maximize production. In August, water was redirected into the more prolific northern half of the unit. This effort alone has increased production by 400 barrels a month or 20% in three months.
The hot oil program, where oil is heated and injected down the well and through flow lines to dissolve flow restricting build up of paraffins, began in October. This ongoing effort will increase the production of two wells per week, the effects of which are expected to be realized in November.
Furthermore, G2 discovered that fluid was accumulating in the primary gas sales line which was creating flow restricting back pressure on the producing wells. This fluid was removed in late October and line pressures have been reduced by 50%, the company said, and the removal of this back-pressure could lead to an increase in gas production and sales.
“I am really optimistic that we will see a substantial increase in overall oil and gas volumes and hopefully continue to set new monthly production records,” said Jim Tague, chief commercial officer. “My appreciation goes to the G2 Energy operations team for their efforts and dedication to optimize production for the Masten Unit”
As previously announced, G2 is raising US$1 million through a guaranteed 12% convertible debenture to execute and accelerate the six-month plan. After the six-month program is finished, production is expected to be around 197 barrels of oil equivalent per day, which is more than 200% of the existing production level.
That would generate monthly revenue of around US$432,000 and an estimated six-month total revenue of about $2 million at prices of $80 oil and $6 natural gas.
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