Nextraction has completed testing its first Viking Horizontal light oil well in the Provost Viking Pool. The 1,200 meter horizontal leg was fractured in 13-stages and flowed at an average rate of 177 barrels of oil equivalent/day (BOE/d) during the first five days of testing.
Average flow rates were comprised of 109 barrels of oil and 410 mcf per day of natural gas, with a 75% watercut. To market and sell the natural gas associated with the oil reserves, the Company plans to construct a pipeline as production volumes are sufficient to warrant economic viability of the pipeline. Permitting of the pipeline is underway and the Company expects construction to be completed late in the fourth quarter.
In an effort to determine if gas rates could be reduced to allow the well to continue producing during pipeline construction, the Company inserted a bridge plug in the well isolating five fractured intervals from production. After installing a down hole pump in the well, the Company tested the eight open fractured intervals for eleven days at an average rate of 73 BOE/d, comprised of 38 barrels of oil and 210 mcf gas per day, with a 91% watercut. Production from the well will continue when the pipeline is operational for gas sales. Production facilities to handle the fluid production are currently being expanded, and the Company has sufficient water injection capacity to handle the water.
Company President Mark S. Dolar said, "Our first well in Provost was successful and is one of the more productive wells in the field. The gas adds economic benefit to the project and we are encouraged to drill a second well in the area."
Nextraction owns 5.25 sections in its Provost pool including 100% working interest in one section, and 50% working interest in an additional 4.25 sections with a joint venture partner. Regulatory approvals have been received for the second horizontal well and the well is expected to spud shortly. The successful completion of the first well further validates the Company's low-risk drilling inventory of up to 36 wells. Nextraction has identified 21 locations which includes 4 locations at 100% interest, and 17 locations at 50% interest (resulting in a further 8.5 net wells). In addition, another 15 locations may be drilled at a 50% interest (7.5 net wells), should down spacing be warranted.
The Company recently announced it has closed a bridge loan with a related party in the amount of $1.5 million to continue development of the project.
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