RE: Q2 Results27 Aug 2021 12:10
I have picked out on paragraph for your attention:
Wyoming, United States
On 16 March 2021 the Company completed the acquisition of Atomic and its affiliated entities. Following the
completion of the Atomic Acquisition (described below), the Company now has an operating interest in the
Powder River Basin of Wyoming, United States consisting of 47,992 acres (gross) of contiguous leasehold,
which include two oil production units: a 58% working interest in the Barron Flats Unit and a 67% working
interest in the Cole Creek Unit as well as one unitized exploration area, the Barron Flats Federal Unit (Deep).
The Company’s strategy for the Atomic assets is to increase the current oil production efficiently and cost
effectively, hand in hand with maximizing the recovery of oil from the targeted reservoirs. The Company and
Atomic had been studying this together pre-closing. These studies initiated by the Company, conducted by a
third-party reservoir engineering firm, focused on the update of the miscible flood reservoir simulation model
of the Barron Flat Shannon miscible flood utilizing production and injection data from initiation of the miscible
flood in December 2019 to the end of December 2020. The Company and Atomic concluded that natural gas
and LPG injection rates at the Barron Flat Shannon unit should increase from the December 2020 rate of 3.4
MMcf/d to 8 MMcf/d to 10 MMcf/d in 2021.
Whilst the Company focuses its work on increased gas injection to the capacity of its currently installed gas
injection facilities it will defer drilling of additional injection and production wells at Barron Flats to 2022. A
previous Ryder Scott Report, dated 1 October 2020, assumed additional drilling in 2021 based on data in hand
from the period ending August 2020. The subsequent analysis of one full year of production and gas injection
data indicated the performance of the miscible flood is exceeding the initial plan. As such, the Ryder Scott
Report filed by the Company as at 31 December 2020, and now updated effective 1 April 2021, has been updated
accordingly to reflect the reservoir performance up to 31 March 2021.
In addition, the Company is evaluating drilling locations and targeted reservoirs in Proved Developed and
Proved Undeveloped Reserve areas in the Cole Creek unit. The purpose of this evaluation will be to drill an
initial 2 to 4 wells in 2021-2022 needed to initiate miscible flooding in 2023-2024 and to increase the Company’s
oil production.
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