The company has dually completed the fourth well on its Floyd prospect in Plaquemines Parish. The upper sand tested at a rate of 1,780 Mcf of gas per day and 30 barrels of oil per day at a flowing tubing pressure of 2,500 psi, and the lower sand tested at a rate of 160 barrels of oil per day and 67 Mcf of gas per day at a flowing tubing pressure of 400 psi. The company has also drilled and logged two additional wells on the Floyd prospect. Both wells encountered multiple pay zones with encouraging oil and gas shows and are currently waiting on the availability of a completion rig. The company presently plans to drill up to four additional wells on this acreage. Under the terms of a farmout agreement, the company bears 100% of the costs on these wells before casing point to earn a 75% working interest in the drilled acreage. The company expects to begin producing the first Floyd well in mid-August and will bring the remaining wells on production as the necessary pipeline facilities are completed.
The company has also completed the A.J. Beshel #1, a 12,000-foot exploratory well in Plaquemines Parish as a gas well which tested at a rate of 2,000 Mcf of gas per day and 245 barrels of oil per day at a flowing tubing pressure of 3,536 psi. The company is currently constructing production facilities for this well and expects to begin selling its production during the fourth quarter. The company owns 100% of the working interest in this well.
The company is currently drilling the Cobena #1, a 15,250-foot exploratory well in Acadia Parish. To date, the company has incurred approximately $4.1 million in drilling costs, net to its 50% working interest, which interest increases to 62.5% at casing point.
The company is currently drilling two exploratory wells in North Louisiana targeting the Hosston/Cotton Valley formations. To date, the company has incurred approximately $3.6 million of drilling costs on the Atkins Estate #1 in Claiborne Parish, net to its 100% working interest, and has incurred approximately $625,000 of drilling costs on the Roberson N. #1 in Lincoln Parish, net to its 71% working interest.
During the fourth quarter, the company plans to begin drilling the first exploratory well in Winn Parish targeting the Bossier formation at a depth of approximately 15,000 feet. The company will own 100% working interest in this well. To date, the company has leased approximately 162,000 net acres in North Louisiana for potential Bossier drilling activities.
The company has leased approximately 35,000 net acres for its Bossier exploration program in East Texas, and currently plans to spud its first well in this area during the fourth quarter.
The company is currently drilling the Focus Ranch Federal 12 #1 well, an 8,500-foot exploratory well in Routt County, Colorado targeting the Niobrara formation. To date, the company has incurred approximately $2.4 million of drilling costs on this well, net to its 95% working interest.
The company is a 33% participant in a joint exploration program with industry partners in the Overthrust play in central Utah. The participants currently plan to begin drilling a 12,000-foot exploratory well in the fourth quarter to test the joint acreage in this area.
The company is a 50% participant in Larclay JV, a joint venture with Lariat Services, Inc. to construct and operate 12 new drilling rigs. To date, Larclay JV has completed construction of two rigs, both of which are drilling for the company in North Louisiana. The company entered into a three-year drilling contract with Larclay JV, assuring the availability of each rig for use in the ordinary course of the company's exploration and development drilling program throughout the term of the drilling contract. The provisions of the drilling contract require that the company contract for each rig on a well-by-well basis at then current market rates. If a rig is not needed by the company at any time during the term of the drilling contract, Larclay JV may contract with Lariat, affiliates of Lariat or other third party operators for the use of the rig, subject to certain restrictions. If a rig is idle, the company will pay Larclay JV an idle rig rate ranging from $8,100 per day to $10,300 per day (plus crew labor expenses, if applicable), depending on the size of the rig. The company presently plans to utilize three rigs in its North Louisiana program, one rig in its East Texas Bossier program, and one rig in the Austin Chalk (Trend) in east central Texas. For the near term, the company expects to release the remaining seven rigs under contract and authorize Larclay JV to enter into contracts with other operators for the use of the surplus rigs.
Clayton Williams Energy, Inc. is an independent energy company located in Midland, Texas.
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