Australian-Canadian Oil Royalties Ltd. (ACOR) states that the Hunt drilling rig is moving to the first drilling location to drill the Pecos-1 on the C-26 structure in the prolific Cooper/Eromanga Basin in South Australia. The camp sites for the crew have already been set up.
The C-26 structure covers approximately 3,459 acres and has approximately 338 foot of closure. In comparison, the C-26 structure is larger than the Worrior Oil Field. The Worrior Oil Field was discovered in 2003, when the Worrior-1 well came in with an initial potential of 2800 BOPD. The oil field is still producing. The latest well, the Worrior-6 well was drilled in 2007 and came in with an initial potential of 2300 BOPD.
So far, the recent rains in the desert have been west of drilling locations, allowing the road crew to continue repairing the roads. The projected spud date is February 25.
The second well is called the Rio Grande-1 and will be drilled on the C-23 structure. The C-23 structure covers approximately 2070 acres and has approximately 300 foot of closure. The C-23 structure has a possible look-alike structure to the Tantana Oil Field.
The Tantana Oil Field has produced approximately 7,340,646 barrels of oil from 12 wells. At current crude prices that equates to approximately $701 million dollars or approximately $58 million per well.
The Tantana Oil Field is also the closest oil field to PEL 112.
The drilling of the Pecos-1 & Rio Grande-1 wells represents two chances of ACOR's possible biggest revenue generating opportunities.
The operator is thinking positively about a possible successful oil well being discovered as they have already purchased the casing equipment needed to complete a successful oil well.
PEL 112 covers approximately 818,904 gross acres, and has never been drilled (no dry holes). ACOR and partners have completed a new seismic survey on PEL 112 at a cost of approximately $1,100,000.
The new seismic survey has discovered two large seismograph highs as well as 19 smaller ones. ACOR and partners have invested approximately six years and several million dollars in PELs 112, 108, & 109. ACOR management is very excited to have negotiated a 3-well carried position over the three areas, which substantially reduces the company's risk. The 13.83% Carried Working Interest has potential to bring substantial revenue into the company, should any or all of the three wells drilled prove to be commercial.
The operator of PEL 112 has agreed to drill and complete three exploratory wells in the northern section of PEL 112. All the wells are approximately 6,000 feet deep and cost around $2.5 million dollars each to drill and complete.
ACOR's carried working interest in the first three wells will exclude ACOR from all exploration and completion costs. After the third well is drilled, ACOR will pay its proportionate part to participate in any additional drilling and/or seismic work on PEL's 108, 109 & 112, as needed.
ACOR owns a 13.83% Carried W.I. through the first 3 wells under PELs 108, 109, & 112.
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