(Alliance News) - Southern Energy Corp said it successfully completed the first of its four drilled wells at the Upper Selma Chalk horizontal well in the Gwinville field.
Over the first 20 days of production, the Calgary, Canada-based natural gas exploration and production company said natural gas rates from the well exceeded 6.5 million cubic feet per day and averaged 5.3 million cubic feet per day under restricted flowing conditions as the well cleans up.
This helped recover around 33% of load fluid to-date with gas produced flowing directly to company owned facilities with all volumes sold, Southern Energy said.
It said it implemented a number of stimulation design changes for this latest Upper Selma Chalk horizontal completion.
"[This] improved the predictability and efficiency of the fracture operation and, more importantly, reduced the overall completion cost down to USD2.1 million, well below budget estimates. Costs for this completion operation are approximately 40% lower than the two previous 18-10 pad Upper Selma Chalk wells that were completed earlier in 2023," said Southern Energy.
Southern Energy said it will continue to monitor the early production performance from the GH 14-06 #3 well over the next couple of months before making a decision on the completion timing of the remaining three DUC wells.
The remaining DUC wellbores have been drilled in the Lower Selma Chalk (2) and City Bank formations, Southern Energy said.
"We are extremely excited to deliver the results of this latest Upper Selma Chalk horizontal well, which we expect to fall in-line with our Gen 2 IP30 type curve estimates. The Southern operations team has successfully analyzed and optimized our early well results to execute what may be our best well to-date, for a fraction of the cost of the prior well completions which bodes well for future well activity," said Chief Executive Officer Ian Atkinson.
"Southern is already selling volumes of gas associated with its latest well at gas prices up over 30% from November lows. Improved production rates at lower capital costs will allow Southern to start redeveloping the Gwinville field on an accelerated timeline as natural gas prices are expected to improve materially into the second half of 2024.
"With the success of the completed well, the company is now looking forward to deploying these successful design changes on our first two Lower Selma Chalk laterals and the next City Bank lateral that remain uncompleted. Our original City Bank horizontal completion at GH 18-10 #1 has shown no decline since being placed on production in July 2023. With these updates we remain eager to highlight the benefits of an optimized completion design performance in this formation delivering value for the business."
Shares in Southern Energy were down 1.6% to 12.55 pence each in London on Tuesday late afternoon.
By Greg Rosenvinge, Alliance News senior reporter
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Southern Energy (SOUC)