Saxon Oil announced that completion work has commenced on the Eumont State No.2 well in Lea County, New Mexico. The Eumont No.2 well is the first development well in the Urssey Tank Seven Rivers field discovered in 2008. The Eumont No.2 well offsets the Eumont State No.1 discovery well, which has already produced over 60,000 barrels of oil since its completion in May 2008. The Eumont No.2 well encountered the same subsurface zones of interest as the Eumont No.1 well, and Saxon expects the Eumont No.2 well to produce in a similar way. Saxon plans to monitor the production from this well for several months but it appears likely that the Eumont No.2 well proved up additional drilling locations. Saxon owns a 15% working interest in the Urssey Tank Seven Rivers field.
Elsewhere, Saxon scored another success with the completion of the Williams 4-9 well in the Lasley field area of Oklahoma. The Western Oil and Gas Development Corporation ("Western") D G Williams 4-9 well was drilled in Caddo County, Okla., as an offset development well to the Williams 3-9 producer. The Williams 4-9 well was completed in the Red Fork sandstone formation and began flowing to sales on in late May. The well is flowing through casing on a 12/64-in. choke with a rate of 1,152 Mcf per day and 8 barrels of oil per day with over 2000 psi of flowing casing pressure. Saxon owns approximately a 1.9 % working interest in the Williams 4-9 well.
Also in the Lasley field area, Saxon is participating in the Western Rosser 2-11 well. The well reached total depth in mid-June and is been completed after logging gas in multiple Red Fork sandstone objectives. Saxon owns approximately a 1.5% working interest in this well. Saxon has also agreed to participate in the Western Kardokus 7-10 development well in Caddo County, Okla., which should commence drilling in mid-July. Saxon owns approximately 10% interest in Kardokus 7-10 well, which is planned as a 13,700-ft Red Fork sandstone development well.
In addition, Saxon plans to drill two development wells in Stanton County, Kan., in the second half of 2009. These development wells are in the prolific Arroyo field where prior wells have produced both gas and oil from several Morrow sandstones. Saxon owns a 75% working interest and will operate both of these wells. Cost estimates and permits are currently being obtained. Workover activity on several oil wells operated by Saxon in central Kansas are also planned for the third quarter and additional drilling opportunities in the shallow gas play alongside gas gathering systems owned by Saxon subsidiary Central Kansas Gas Gathering are also possible later this year.
Richard G. Green, president and CEO of Saxon, stated, "Although we are focused on our very large potential properties in Europe, we are continuing to develop our core assets in the U.S. Dramatic declines in drilling and completion costs coupled with firming of oil and gas prices make prudent development project economically attractive. Drilling these successful development wells and proving up additional development drilling locations in New Mexico, Oklahoma, and Kansas will ultimately lead to increased reserves, cash flow and stockholder value."
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