American Petro-Hunter announced that drilling operations have commenced at the Archer-Tsakopoulos #2 site on the Wurster Gas project in California. The drill rig arrived today and is preparing to spud the well late this evening or tomorrow.
The 7,800 foot test well targets Winters sandstones which, in the Sacramento Valley, have accounted for over 400 BCF of gas production to-date along the trend. The Hood-Franklin field to the north contains four wells in the Winters at 7,600 feet which have cumulatively produced 3 BCF gas. The field was discovered in 2004 and has been producing since 2005. At Wurster, the 3D seismic shows a strong AVO in 35 feet of pay. Drilling should take approximately 8 days and estimated recoverable reserves at Wurster are 10.5 Bcf gas.
In related news, the Company has increased its Working Interest (W.I.) in the Archer-Tsakopoulos #2 well up to 36% by purchasing an additional 11% through the payment of a pro-rata share for the seismic reprocessing and drilling costs in the amount of $66,000.
In the event of a commercially viable well, the estimates on projected initial production rates could be 3,000 MCF per day comparable to the I.P.R.s of the producing wells to the north. Additional wells would be probable in order to fully exploit a discovered gas reservoir at Wurster which lies 1/2 mile from the Hood-Franklin pipeline and which is owned and operated by the operator thereby allowing for low-cost and rapid tie-in to facilitate gas sales. Current gas prices for PGE-Citygate gas today is $4.20 and futures are in the $6.00 range for early 2010.
In other Company news, Management wishes to report that the #2 Lutters well at the Poston Project in Trego County, Kansas was drilled to a total depth (T.D.) of 4,320 feet. The well has encountered good oil shows during drilling and in initial Drill Stem Tests (D.S.T.) from a target pay zone. However, after running electronic logs the reservoir was determined to be tight at this location. Permeability and porosity were not adequate to produce oil in sufficient quantities to justify completion of the well as a practical commercial producer. The project itself remains viable as there are additional offset opportunities in three directions from the producing #1 well, and with the added data gleaned from this test these locations will be drilled in the future. The Company remains optimistic that with the new information gathered that full development of the field as previously stated could contain up to 240,000 barrels of oil.
At the Victory-Randal Island North prospect, the Archer-Myers #1 was drilled to a total depth (T.D.) of 7,985 feet. The target sands were encountered at 7,713 feet and contained gas shows, however the gas volumes were insufficient to warrant completion of the well as a viable producer. The drilling equipment has finished rig down and left the site in order to commence drilling at the Wurster location.
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