Magnolia pleased with initial production at Gilchrist
US-focussed oil and gas exploration and production company Magnolia Petroleum announced on Thursday that the initial production rates for the Gilchrist 2016 1-36H well in Oklahoma had significantly exceeded its projections, producing 652 barrels of oil per day (bopd), with a volumetric flow rate of 1,178 Mcfd - or 770 barrels of oil equivalent per day - with an associated flowing tubing pressure of 120 psi.
The AIM-traded firm said Gilchrist is operated by SandRidge Energy, with Magnolia having a carried working interest in the well through its agreement with Western Energy Development.
It said Gilchrist was the first well to be drilled on the spacing unit, with the “excellent” initial production rates - which were 35% higher than Magnolia’s pre-drill estimates of 570 barrels of oil equivalent per day - expected to result in the drilling of infill wells in due course to maximise the recovery of reserves.
As it announced on 3 November, Magnolia and Western Energy Development had elected to take their proportionate share of any interests in the lease that became available as a result of the non-participation of leaseholders in a forced pooling order.
That resulted in Western Energy and Magnolia increasing their combined working interest to 1.57% in the spacing unit on which the Gilchrist Well is located, and where additional increased density wells were expected to be drilled in the future.
Under the terms of its agreement with Western Energy Development, Magnolia was carried for 25% of Western’s working interest in the Gilchrist Well at no cost.
“This excellent IP rate has exceeded our expectations,” said Magnolia CEO Rita Whittington.
“At 770 boepd, Gilchrist is producing 200 boepd more than we originally projected.
“The results of Gilchrist validate our decision to increase our interest in the lease via the forced pooling order and importantly they significantly de-risk the spacing unit.”
Whittington said the company anticipated participating in any infill wells that may be drilled in the future, as the board looked to increase its total production and reserves across its portfolio of interests in proven US onshore formations.
“In the meantime, with the first $0.5m tranche of the $18.5m Western Energy Development agreement now in place, we are looking to invest this sum on behalf of Western’s clients which - based on the successful pilot programme - has the potential to add 27 potential wells to our inventory.
“We are currently evaluating several deals for this initial $0.5m and I look forward to providing further updates on this matter in due course.”