Brookside Energy Ltd’s (ASX:BRK) Orion Project Joint Venture with Stonehorse Energy Limited (ASX:SHE) has executed a purchase and sale agreement for its third producing property acquisition, the Thelma 1-32 well, including the associated 40 HBP acres and existing infrastructure.
The Thelma Well is in the Murray County, Oklahoma, US, in the southern part of the SCOOP Play, around 20 miles east-northeast of Brookside’s Jewell DSU.
This third acquisition in less than four months expands on the Orion JV’s scope and scale by adding virgin proved developed not producing (PDNP) reservoirs and their untapped volumes to future potential production.
Brookside managing director David Prentice said: “We are once again delighted to bring news of another successful Orion Project Joint Venture acquisition to our shareholders.
“This latest deal is another example of our teams’ ability to remain disciplined and focused on returns and still deliver significant growth potential from the producing property acquisitions pillar of our business.
“We are very much looking forward to providing further updates from this new and exciting AOI as we optimise production and further investigate the significant underdeveloped potential in the area.”
Thelma Well was drilled and completed in 1992 as a vertical well targeting the Simpson Group and was spaced on a 40-acre drilling spacing unit (DSU).
The well is around 20 miles ENE of Brookside’s Jewell DSU in the SWISH AOI in an area that can exhibit high oil production per unit with multiple discrete high porosity high permeability target zones.
This well has produced about 57,000 barrels of oil to date which, based on the internal estimates prepared by Black Mesa, indicates that material volumes are still to be extracted from producing zones or behind pipe formations, making this well a prime workover candidate.
Successful restoration of commercial production in the Thelma Well will establish a new AOI for the JV complementing the SWISH AOI.
“Expands JV footprint”
The JV was formed in mid-June 2020 to target mature long-life production assets with very low terminal decline and upside that can be unlocked from remedial workover activity and/or unexploited or underexploited behind pipe or deeper productive zones.
Stonehorse managing director David Deloub said: “As scale and holding acreage by production is the key to the Orion JV we are very pleased to announce a third acquisition within four months of the joint venture’s operation.
“In addition to providing several high potential targets in this well this also expands our footprint and establishes a new AOI in Murray County.”
The footprint of the Orion Project has now been expanded to encompass a new area outside of the SWISH area of interest (AOI) with considerable upside potential from additional PDP acquisitions and/or development opportunities.
Workover operations are set to begin shortly with a rig expected to be moved on location early next month.
These operations will include inspection and repair or replacement of both surface and downhole production equipment as well as a ‘clean-up’ of the perforated intervals to optimise the existing production.
Future work will include adding further production and cashflow through recompletions of already identified behind pipe reservoirs that have produced in offset wells surrounding the Thelma Well.
Pipeline of opportunities
The joint venture is continuing to work up a pipeline of opportunities.
The Black Mesa team has already identified a large number of potential acquisition targets both within the SWISH AOI and more broadly in the southern Anadarko Basin region that satisfy the JV’s investment hurdles and work to advance these opportunities and add to the list of targets is ongoing.