The 14 feet interval is 9,849 feet deep and has the potential to recover up to 100,000 barrels of net oil at flow rates of up to 100 barrels of oil per day.
The tool used to log this data also confirmed multiple, thinner, potential zones of interest above the interval that will be evaluated in due course.
The well is presently undergoing cement squeeze operations to isolate the pay zone interval prior to perforating and testing next week.
Grand Gulf has a diversified geographic oil and gas portfolio in the U.S. and Poland with active news flow in both jurisdictions.
Following successful re-completion and production from the Smak Dixon 31-11, the company will undertake a re-completion program in the Smak Dixon 31-6.
The Smak Dixon 31-6 is also anticipated to have up to 100,000 barrels of recoverable oil remaining.
The Pleasant Home Field in Alabama has produced in excess of 934,000 barrels of oil since 1999 from the 4 wells.
The wells produce from multiple zones and presently have a number of zones that, based on show and log data, are interpreted to be bypassed oil pay and are yet to be completed for production.
Following an evaluation of the recompletion results the company will be better placed to determine whether the field can support additional development drilling.
If so, up to 650,000 barrels of additional oil (gross) may be proven.
The contract terms are as follows:
- Grand Gulf will undertake reservoir saturation tool logs and cement bond type logs on 2 wells (Smak Dixon 31-6 and 31-11);
- Following recompletion of the first well the company will have earned a 50% working interest in that well and its facilities and will derive 75% of net revenues until its recompletion costs and entry costs are recovered. In the event the well is uncommercial the company may withdraw from the project with no further obligations;
- Following 60 days of commercial production from the recompletion of the 31-11 the company will issue 19.5 million ordinary fully paid shares to the operator;
- Following recompletion of the second well the company will have earned a 50% working interest in the field and all facilities; and
- Grand Gulf’s committed to funding the initial $350,000 of recompletion costs (including RST and CBL type logs) following which all costs are to be shared 50/50 with the operator. Grand Gulf will have met this obligation following recompletion of the 31-11. In addition, Grand Gulf is liable to pay an entry fee of US$50,000 as a satisfactory review of the 31-11 RST logs has been completed.
The U.S. oil assets are an important second frontier to Grand Gulf’s Poland assets, which complete the dual oil and gas strategy.
The untapped oil interval that has been logged is encouraging and the testing that is being planned next week will be highly anticipated by the market.
Grand Gulf Energy recently acquired a 20.4% interest in the Boleslaw gas prospect in central Poland, which has a best estimate unrisked Prospective Resource of 87 billion cubic feet of gas.
The Boleslaw #1 Well was spudded on 11 December 2016 and is presently completing a casing run at 952 metres.
Grand Gulf shares are trading 75% higher at $0.007 compared to six months prior.