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Positive Test Results from LM#20 Well, Shoats Creek
Northcote has announced test results for the Lutcher Moore #20 well (LM #20) at Shoats Creek Field, Beauregard Parish, Louisiana in which it owns a 93% working interest, of 260 barrels of oil and 500 mcf of natural gas per day (or 340 barrels of oil equivalent per day on the basis of 6 mcf of natural gas per barrel of equivalent).
HIGHLIGHTS:
– 24 hour test result at LM#20 of 340 BOEPD (237.15 net to Northcote)
– Application filed for allowable daily production limit for the well of up to 250 BOPD gross
– Shoats Creek drilling inventory increased by up to three drill locations from its previously announced 8 well drilling inventory
– Management expects the well to pay out the $813,750 investment in approximately 10 to 12 months at a $40 oil price
Northcote Managing Director Randall J. Connally said, “We have been very pleased with this well during every step of drilling, completion and testing. The well has substantially exceeded our pre-drill expectations in multiple areas including thickness of pay-zone, oil cut and daily rates achieved during testing. We used the very best geological and engineering consultants as well as latest thinking in the techniques and equipment available for development of this formation. We believe this outcome validates that Shoats Creek has substantial development potential and underscores the original rationale for our acquisition of this company making oil and gas asset both initially from Aminex and then the acquisition more recently of NAP USA, Inc.
“I would note that our peak test rate exceeded 360 barrels of oil and 800 mcf of natural gas per day or approximately 500 barrels of oil equivalent per day. We believe the final test represents a long-term optimal production rate to balance daily production with maximisation of long term recoverable reserves from the well bore. I expect that the well should pay out our investment in approximately 10 to 12 months at a $40 oil price based on sustainable production in the range of 200 to 250 barrels of oil and associated natural gas.”
ABOUT THE LM#20
The LM #20 was originally drilled approximately 130′ northwest of the Lutcher Moore #16 to 5500′ to test the Frio member of the Oligocene formation. The well encountered approximately 10′ to 12′ of pay with an estimated 20%+ porosity. Total cost through testing is estimated at US$875,000 (US$813,750 net to Northcote).
On 24 August 2015 Northcote perforated five feet of the payzone from 5018′ to 5023′. After allowing the well to clean-up, Northcote has run 7 tests under jet pump at various choke and pressure sizes with its final 18 hour test under a 32/64 inch choke at 2,500 pounds per square inch pressure and a three quarters of a barrel per minute injection rate resulting in 741 barrels of total fluid, 198 barrels of oil and approximately 100 mcf for every 50 barrels of oil produced. Based on a twenty four hour period the results equate to in excess of 260 barrels of oil and 500 mcf of natural gas per day (or 340 barrels of oil equivalent per day on the basis of 6 mcf of natural gas per barrel of equivalent). Northcote has filed for an allowable daily production limit for the well of up to 250 barrels of oil per day with the Louisiana Department of Natural Resources. The oil produced at the LM#20 will be immediately available for sale and the gas will become available for sale once Northcote has tied this well into the local gas network. In this regard Northcote is having discussions with potential natural gas purchasers and intends to add necessary infrastructure to sell natural gas to third-party purchasers as part of its overall field development plan.
Northcote believes that the positive well results add two to three drill locations to its previously announced 8 well drilling inventory and it intends to have an updated reserve report prepared for Shoats Creek and the Frio formation which it will announce to the market in due course.
