Announcements

14 January 2013 Proforma Schedule 1 Pre-Admission Announcement
News

Operations Update

RNS Number : 6625W
Northcote Energy Limited
30 January 2013
 



 Northcote Energy Ltd / Index: AIM / Epic: NCT / ISIN: VGG6622A1057 / Sector: Oil & Gas

30 January 2013

Northcote Energy Ltd ('Northcote' or 'the Company')

Operations Update

 

Northcote (AIM: NCT), an onshore US oil and gas exploration and production company, is pleased to announce a positive update on its operations in Oklahoma, US, including the initiation of a four well workover programme, with completion of the first of these well workovers resulting in an increase in daily production, and commencement of work in connection with the fraccing programme, all in the proven Mississippi Lime formation

 

Key Highlights

 

·        Initiated workover of four producing horizontal wells at its Horizon Project, in which Northcote has an average 28.5% working interest, to increase production in wells not immediately scheduled for fracture stimulation

·        Excellent results from the first workover of the Little Drum well, more than doubling production rate

o Gross production increased to more than 27 boe/d from 13 boe/d (representing an increase of 3 boe/d to Northcote's interest net of royalties and other working interests)

·        Preparation for fracture stimulation programme on Horizon Project in Osage County, has commenced

o Completed bottom hole pressure tests on all wells alongside the preparation of first two well sites and the necessary water supplies have been procured

o Completing short pipeline project to enhance salt water disposal capacity in anticipation of significantly higher liquids volumes post-frac

·        Fracture stimulation of first two wells expected to commence late February/ early March 2013

·        Commenced evaluation of a number of low cost opportunities to develop other prospective formations on Northcote's existing lease portfolio and other properties

 

Northcote's Chief Executive Officer Randy Connally said, "Having listed on AIM and raised capital earlier this month, we are pleased to have begun to deliver on our stated objective of building our existing net production, which at listing stood at 26.4 boe/d.  The results from the Little Drum workover bode well for similar exercises due to be carried out on the three other producing horizontal wells.  This work and the commencement of our fracture stimulation programme in the coming weeks mean we are on course to increase net production significantly.  Additionally, we continue to evaluate further opportunities to increase our acreage and subsequent reserves, which were assigned a P1 PV10 of US$33.8 million by our competent person on admission."

 

Northcote's Technical Director Kevin Green said, "In December 2012 we ran pressure tests and fluid level data on all well bores to help prioritise candidates for the fracture stimulation programme.  The information obtained from this also suggested that minor workover adjustments to pumps, combined with well bore acid clean ups, could materially increase production from those wells that are not initially targeted for fracture stimulation.  We are very encouraged that the workover programme has got off to a good start with the doubling of production at Little Drum.  Finally, in anticipation of increased fluid and gas rates, we are re-configuring transport lines as well as confirming our disposal capabilities to handle the increased liquid production levels resulting from the upcoming fracture stimulation programme." 

 

The Horizon Project, Osage County Oklahoma:

 

Northcote's interests in Osage County comprise working interests in 10 producing wells, of which nine are unfracced horizontal wells producing from the Mississippian formation and one is a vertical well producing from the shallower Layton formation (Burkhart #3).

 

The workover programme was initiated based on evaluation of wells and bottomhole pressure tests run in December 2012 in preparation for the fracture stimulation programme.  As part of the evaluation of wells, it was determined that Northcote could materially increase production from wells that were not part of the planned four well fracture stimulation programme through a workover programme that consisted of, depending on the well, re-acidizing, pumping down fluid levels and in some cases installing larger submersible pumps.

 

Northcote intends to utilise hydraulic fracturing techniques in relation to the unfracced horizontal wells.  Hydraulic fracturing ('fraccing') is the primary choice for enhancing production, and typically has the effect of increasing productivity 2 to 30 times compared to an untreated well, by increasing the amount of contact that the well bore has with high quality reservoir rock.

 

The Company has commenced an evaluation of a number of low cost opportunities to develop other prospective formations on Northcote's existing lease portfolio and other properties.  As with the successfully producing vertical Burkhart #3 well, new well opportunities are targeted based on information obtained through the on-going Mississippian programme and are undertaken only in situations where Northcote believes the well will generate compelling economics to Northcote shareholders.

 

**ENDS**

 

For further information and the full Admission document visit www.northcoteenergy.com, see below or contact the following:

 

Randy Connally

Northcote Energy Ltd

+01 214 675 7579

Ross Warner

Northcote Energy Ltd

+44 7760 487 769

Dan Jorgensen

Northcote Energy Ltd

+44 (0) 20 7024 8395

Roland Cornish

Beaumont Cornish Ltd

+44 (0) 20 7628 3396

James Biddle

Beaumont Cornish Ltd

+44 (0) 20 7628 3396

Jerry Keen

Shore Capital Stockbrokers Limited

+44 (0) 20 7408 4090

Bidhi Bhoma

Shore Capital Stockbrokers Limited

+44 (0) 20 7408 4090

Hugo de Salis

St Brides Media and Finance Ltd

+44 (0) 20 7236 1177

Elisabeth Cowell

St Brides Media and Finance Ltd

+44 (0) 20 7236 1177

 

Notes:

 

Northcote Energy Ltd is a revenue generative US onshore oil and gas production company focussed on the rapidly emerging Mississippi Lime formation in Oklahoma.  The Company participates with leading operators, including Midstates Petroleum and Chesapeake Energy, in low risk development plays where advanced techniques, such as horizontal drilling and fracing, are used to unlock known oil accumulations and dramatically improve recovery rates.  Northcote has a balanced mix of production and development projects with net proven reserves of 665 Mbbl and 1,686 MMcf and a P1 PV10 of US$33.8m (as per CPR). Management is focused on increasing production through a multi-well drilling and fracing campaign in 2013.

 


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