Northcote Energy - Highly Positive Frac Update

Northcote, an onshore US oil and gas exploration and production company, has announced initial positive results from the successful fracture stimulation of its Big Hill 1 well at the Horizon Project, Osage County, Oklahoma, in which Northcote has a 51.75% working interest (41% Net Revenue Interest) and an update on the testing of Big Hill 2.

 

Key Highlights 

· Testing on the Big Hill 1 well, the first in the four to six well frac programme reported:

• Open flow rate of up to 1210 Mcf/day of natural gas (215.5 boepd gross, 88.4 net to Northcote) representing a 1200% increase on the 3 month average production prior to stimulation.
• Average since completion of the frac of 16 barrels (gross) of oil per day, where previously the well had not been an oil producer, providing further encouragement that the fracture stimulation has enabled the well bore to open up unexploited reservoir.
• At open flow, inclusive of the oil production, the well has demonstrated the potential to produce up to 231.5 boepd (net to Northcote 95boepd).

· The well has been producing on a limited choke and the gas production has averaged 204 (gross) Mcf/day since the frac.

· Once the increased choke is applied and production has stabilised, the frac at Big Hill 1 can be expected to contribute significantly towards Northcote’s 2013 100 boepd target.

· Testing at the Big Hill 2 has been suspended following the identification of a leak in the tubing - results previous to the discovery of the leak were positive.  The operator is working to correct this and results will be available in due course.

· Plans for fracture stimulation programme at two further producing wells is underway.

Northcote’s Chief Executive Officer Randy Connally said, “we are delighted by the initial performance of the Big Hill 1 well, which has the potential, once the choke is increased, to significantly increase production above the pre-frac levels.  The success of the Big Hill #1 represents a big step towards meeting our 100 boe/d 2013 target.

“The Big Hill 1 was internally ranked as our most gassy and worst performing well of our nine Mississippian wells prior to stimulation.  We believe the success of this stimulation, with an open flow rate potential over 12 times higher than the pre-frac levels, is a positive indicator as we move to stimulate the remaining seven historically better performing wells in our portfolio.  We are also delighted that this well, which has historically produced minimal oil volumes, is consistently producing good levels of oil along with higher natural gas production. 

“We look forward to updating the market on the performance of Big Hill 2, where results were positive until we discovered a leak in the tubing earlier this week, which is now being rectified.  We are also continuing to plan the stimulation of two additional wells, to complete our initial four well frac programme and will announce expected timing as we get a firm date scheduled.”

About Horizon  - frac programme

Hydraulic fracturing techniques are being utilised on unfracked horizontal wells on the Horizon Project as part of the company’s strategy to significantly increase production to 100 boe/d.  The company announced the completion of the fracture stimulation of the Big Hill 1 and the Big Hill 2 on 3 May 2013.

Following completion of the fracture stimulation programme the well has been on limited production and is still recovering frac fluids along with formation water. During this time the well produced oil at a flow rate of approximately 16 barrels, with a production high of 40 bbls per day.  Natural gas averaged 204 Mcf/day through a 5/64 in. choke at 130% of its meter capability with casing pressure of 175 - 200 psi.

Flow measurement services calculated that the open flow rate of the well was up to 1210 Mcf of natural gas per day. Northcote therefore plans to increase the choke size to maximise production a process, which requires supervision of Osage representatives and will occur in due course. Once the choke is increased we expect this to permit increased sales rates and the resultant production will be reported accordingly.

The Big Hill 2-H has a tubing leak and will have to be serviced prior to further testing, we do not expect the costs of this to affect the overall budget for the well.  Once operations at the Big Hill 2 have resumed we will announce test results in due course.

The Company has plans underway for the fracture stimulation of the next two wells and further information will be provided on anticipated timings when finalised.

The Horizon Project in Osage County contains multiple potential pay zones for oil and liquids-rich natural gas. Northcote's current prospects in the Horizon Project include both horizontal and vertical opportunities. The Horizon property now totals over 1800 net acres. Management continues to monitor opportunities to accelerate the development of the Horizon project and to supplement it with additional opportunities in Osage and surrounding counties.

 

 

 

Adapted from press release by David Bizley

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/28052013/northcote_energy_highly_positive_frac_update/