Native American Energy issued a formal update relating to its five-well workover program currently underway on and near the Fort Peck Reservation in the Williston Basin in Northeastern Montana.
Cox 7-1 Well
In mid-October, NAGP installed a new Heater Treater on the Cox 7-1 well, located on the Company's 80-acre leasehold in Roosevelt County, Montana. Having confirmed that the new equipment is operating properly, the Company has now begun the next phase of the workover, in which the well produces a mixture of the water used down hole in the workover operations and oil from the producing formation. The Company expects that this phase of the workover will take about two weeks, at which time commercial oil production will be started. The Company is also in the process of preparing the well site for winter weather conditions. As previously announced, the Cox 7-1 well is expected to flow initially at approximately 50 barrels of oil per day once commercial production begins.
Sandvick 1-11 Well
NAGP has also completed the first phase of the workover of its Sandvick 1-11 well, located on 320 acres in Valley County, Montana on the Fort Peck Reservation. The Company is now engaged in testing and adjusting, as necessary, the surface equipment, such as the Heater Treater, pump jack, et al., as well as winterizing the site. The Sandvick was originally drilled in 1983 by Clayton W. Williams, Jr. and was completed at 99 barrels of 38 Degree API Gravity Oil per day; however the average historical production of the well through the 1980s and 1990s declined to approximately 20 barrels per day, due largely to mud blockages down hole. During the initial phase of the workover, NAGP engaged enhanced oil recovery technology and succeeded in overcoming mud filtration issues which hindered past production. Based on its current results, the Company expects Sandvick to yield approximately 60 barrels of oil per day upon moving to commercial production next month.
Wright 5-35 Well
Last week, NAGP moved its rig from the Sandvick well site to the Wright 5-35 well, located on its 160-acre lease in McCone County, Montana; and has initiated the workover. The Wright well was first drilled in 1960 by State Oil and Cities Service Oil Company. Original completion of the well resulted in 36 barrels of oil per day, a production level which persisted for most of its productive life through 1985 when it was shut down for two years. The well was brought back into production in 1987 and continued to produce oil until 1995 when it was again shut down. At that point in time, oil production had declined to approximately six barrels of oil per day due to a build-up of paraffin that plugged off perforations in the well bore. Following its acquisition of the lease in 2006, NAGP serviced the well and applied a paraffin surfactant to clean the perforations, casing and tubing. Over the two-day well testing period, Wright produced over 400 barrels of 36 Degree API Gravity Oil.
The current rework of the Wright well and the related enhanced oil recovery process underway at the site are expected to be completed within the next several weeks. Anticipated daily oil production will be announced at that time.
Notwithstanding any unexpected delays with the workover completion at Wright, NAGP will then proceed with the workovers of Beery 2-24 and Beery 22-24 - both of which are located on the Company's 320 acre leasehold in McCone County.
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