LONDON (Alliance News) - Northcote Energy Ltd and Red Rock Resources PLC Monday said the Lutcher Moore 20 well on the Shoats Creek field in Louisiana has started producing hundreds of barrels of oil each day and said it will also begin producing gas in the future.
In separate but identical statements, the two companies said the well has reached a peak rate of 325 barrels of oil per day using a unidraulic jet pump and a 30/64th inch choke, but this has dropped to an average of 200 barrels per day over the last three days using a 18/64th inch choke, with a 30% oil cut.
Northcote has a 70% working interest in the well and a 52.8% net revenue interest, meaning around 105 to 106 barrels a day are net to the company whilst Red Rock holds a 20% working interest in the well with a 14.4% net revenue interest, meaning it is entitled to around 28 to 29 barrels of oil per day at those rates.
"The operator, Shoats Creek Development Inc, has advised Northcote that it intends to produce the well consistently at between 200 and 225 barrels of oil per day," the companies said.
Importantly, the well is also thought to be capable of producing 250,000 cubic feet of gas per day on top of that oil production. That gas has been "metered" but is not currently being sold, they said.
"The operator has elected to produce the well at a rate that it believes will maximise total recovery from the well and thus peak potential daily production rates substantially exceed current production levels. However, the objective is to produce at the maximum rate that can be sustained thereby minimising decline, optimising cumulative production and investment returns from the well," said the AIM-listed companies.
"At current levels it is anticipated that the well will have a relatively flat production profile for an extended period of time. The partners in the LM20 well, including Red Rock and Northcote Energy Limited, have plans to commence sales of natural gas in conjunction with bringing production from the next two wells to be drilled online and are in discussions with parties about the infrastructure and access to pipelines to sell natural gas," they added.
Northcote shares were up 3.7% to 0.0674 pence per share whilst Red Rock shares were down 5.3% to 0.426 pence.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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