24 Mar 2016 07:00
NORTHCOTE ENERGY LIMITED - 2016 Work Programme at Shoats Creek, LouisianaNORTHCOTE ENERGY LIMITED - 2016 Work Programme at Shoats Creek, Louisiana
PR Newswire
London, March 23
Northcote Energy Ltd / Index: AIM / Epic: NCT / ISIN: VGG6622A1057 / Sector: Oil & Gas
24 March 2016
Northcote Energy Ltd
(‘Northcote’ or ‘the Company’)
2016 Work Programme at Shoats Creek, Louisiana
Northcote Energy is pleased to provide details of its fully funded 2016 work programme at the Shoats Creek Field in Louisiana, including the spud date for the drilling of the Lutcher Moore #21 well (‘LM #21’), which has been set for around 16 May 2016. Following discussions with Shoats Creek Development, Inc., the operator of the field, the agreed work programme is focused on growing production and high grading additional potential locations.
2016 Shoats Creek Work Programme:
Drilling and completion of three new wells drilled to a targeted depth of 5500 feet to test multiple Frio sands at approximately 5000 feet Re-entry of and installation of production equipment to support production from one existing Cockfield well Re-entry and conversion of an existing well bore to a second salt water disposal well (in addition to the Lutcher Moore #15 well) to provide for expanded capacity and redundancy to the existing salt water disposal well Negotiation of a natural gas contract and installation of necessary equipment to permit sales of natural gas Leasing of an additional 500 to 700 gross acres to expand the project area and provide additional prospective drilling locations Additional geophysical and engineering work to high grade existing and add additional Cockfield locations in anticipation of including Cockfield drilling in the 2017 work programmeNorthcote has received ‘Authorisations for Expenditure’ from the operator for the following activities at Shoats Creek:
Pad site preparation, drilling and completion of the Lutcher Moore #21 and Lutcher Moore #22 wells which are to be drilled back to back Lease, environmental and permitting costs associated with preparation to drill the Lutcher Moore #23 well in Q3 2016 Re-entry and conversion of the LL&E#1 to salt water disposal as well as miscellaneous costs associated with development and production of the Shoats Creek Field Northcote's net share of costs associated with these activities is approximately US$500,000 - including the impact of carried interests, the net cash requirement falls to approximately US$300,000, all of which will be funded from existing cash resources| Project | 100% WI | Net NCT funding capital |
| LM#21 Drill & Complete | $951,700 | $190,340 |
| LM#22 Drill & Complete | 951,700 | 190,340 |
| LL&E SWD Conversion | 415,440 | 83,088 |
| LM#23 Environmental & Lease | 76,823 | 15,365 |
| Miscellaneous | 80,000 | 16,000 |
| Total | $2,475,663 | $495,133 |
| (Less: Benefit of Carry) | (200,000) | |
| Net | $295,133 |
The Lutcher Moore #21 & Lutcher Moore #22 Wells
The LM#21 will be a twin to the Lutcher Moore #8 (‘LM#8’) which was originally drilled to 9136 feet in 1950 and completed in the Cockfield-5- it initially produced 185 barrels of oil and 185 mcf of natural gas with no water - the logs indicate Frio pay from 5029-5036 feet In 1991 an unsuccessful squeeze and recompletion on LM#8 in the Frio was attempted and the well continued to suffer from water and sand issues - the Company believes that as the LM#8 was a 40-year-old well when the failed squeeze was attempted, it had little chance of success The completion programme which was successfully executed on the LM#20, using stronger, higher quality casing and rotation of casing while cementing to get a smooth even bond over the pay zone, will be implemented on both the LM#21 and LM#22 wells The LM#21 will be located to the northwest of the LM#8 to position it structurally higher in the formation to potentially get updip and intersect a thicker payzone than the LM#8 The Lutcher Moore #22 well (‘LM#22’) is being planned to start immediately following, but subject to the successful completion LM#21 - further details regarding the LM#22 will be provided in due courseNorthcote Managing Director Randall J Connally said "We are excited to initiate the 2016 work programme at Shoats Creek Field. The projects on which we are focusing will drive production growth while achieving diversification from potentially five producing wells at Shoats Creek by year-end. At the same time, additional geophysical and engineering work will be initiated to high grade the Cockfield formation as we look to prepare to drill this formation. While we are excited about the results we have seen to date in the Frio formation, it is important to remember that the Cockfield is the backbone of most oil and gas development activity in this area and I believe in the long-run this will be the case for Shoats Creek Field as well."
**ENDS**
For further information visit www.northcoteenergy.com or contact the following:
| Randy Connally | Northcote Energy Ltd | +1 214 550 5082 |
| Ross Warner | Northcote Energy Ltd | +44 7760 487 769 |
| Roland Cornish | Beaumont Cornish Ltd | +44 20 7628 3396 |
| James Biddle | Beaumont Cornish Ltd | +44 20 7628 3396 |
| Elliot Hance | Beaufort Securities Ltd | +44 20 7382 8300 |
| Nick Bealer | Cornhill Capital Limited | +44 20 7710 9612 |
| Elisabeth Cowell | St Brides Partners Limited | +44 20 7236 1177 |
All of the technical information that is contained in this announcement has been reviewed internally by the Company's Technical Director, Mr. Kevin Green. Mr. Kevin Green is a Petroleum Geologist who is a suitably qualified person with over 30 years' experience in assessing hydrocarbon reserves and has reviewed the release and consents to the inclusion of the technical information.
Notes:
Northcote Energy Limited is an entrepreneurial energy company with diverse interests. The Company combines a portfolio of US exploration and production assets in Louisiana and Oklahoma with the development of new business opportunities in the US and also in Mexico as well as Indonesia via a strategic relationship with Andalas Energy & Power Plc.
NCT’s Interest in the Shoats Creek Field is as follows:
| Current Interest | |||||||||||||
| Phase 1 (1) | WI | NRI | ORRI | Partners: SCDI 3% + | |||||||||
| Directly Held (2) | |||||||||||||
| Frio | 20.00% | 15.09% | 1.72% | GCW | NCT | RRR | SEP | ||||||
| Cockfield | 40.00% | 29.49% | 1.72% | GCW | NCT | --- | SEP | ||||||
| Wilcox | 25.00% | 18.86% | 0.86% | GCW | NCT | --- | --- | ||||||
| Equity Interest (3) | |||||||||||||
| Frio | 3.36% | 2.42% | 0.00% | ||||||||||
| Cockfield | 3.36% | 2.42% | 0.00% | ||||||||||
| After Phase 1 | |||||||||||||
| Phase 2 (1) | WI | NRI | ORRI | Partners: SCDI 3% + | |||||||||
| Directly Held | |||||||||||||
| Frio | 27.00% | 20.13% | 1.72% | GCW | NCT | RRR | --- | ||||||
| Cockfield | 47.00% | 34.53% | 1.72% | GCW | NCT | --- | --- | ||||||
| Wilcox | 25.00% | 18.86% | 0.86% | GCW | NCT | --- | --- | ||||||
| Equity Interest (3) | |||||||||||||
| Frio | 0.00% | 0.00% | 0.00% | ||||||||||
| Cockfield | 0.00% | 0.00% | 0.00% | ||||||||||
| Notes: | |||||||||||||
| (1) Phase 1 refers to the first 4 wells, including the Lutcher Moore #20, drilled at Shoats Creek | |||||||||||||
| Phase 2 refers to wells, beyond the first 4 wells, contemplated to be drilled at Shoats Creek | |||||||||||||
| (2) Refers to interests held by Northcote or one of its wholly owned subsidiaries | |||||||||||||
| (3) Equity Interest refers to Northcote's 48% equity ownership in Springer Energy Partners, LP (SEP) which is owner of a 7% WI and 5.04% NRI | |||||||||||||
| (4) After completion of the Lutcher Moore #22 well, Northcote also has right of first refusal to additional 20.0% WI and 14.4% NRI in Frio if RRR does not participate for any reason. | |||||||||||||
| (5) RRR is Red Rock Resources, plc. | |||||||||||||
Glossary:
BOE: barrels of oil equivalent, gas is converted at its energy equivalent of 6000 cubic feet per barrel of oil
BOEPD: barrels of oil equivalent per day
BOPD: barrels of oil per day, abbreviation for barrels of oil per day, a common unit of measurement for volume of crude oil. The volume of a barrel is equivalent to 42 US gallons
Mcfd: Thousand Cubic Feet per Day
NRI: Net Revenue Interests
Oligocene: a geologic epoch that extends from about 33.9 million to 23 million years before the present
Pay or Payzone: an interval within a rock formation that contains quantities of hydrocarbons thought to be economically viable. This interval is commonly determined using various logging tools run by the operator prior to making the decision to complete a well for production.
Squeeze and recompletion- the application of cement into a zone expected to be leaking water into a well bore