Otis Energy (ASX: OTE) has acquired a 10% working interest in the potential 126 million barrels of oil and 379 billion cubic feet of gas reserve Avalanche 3D project, located in South Central Louisiana, U.S.
Otis Energy (ASX: OTE) will find out soon if the WC 35 State-1 well in the Sombrero project in New Mexico would add to its production.
The operator is set to perforate the well in the San Andres formation, which produces oil across the region, and acidise it before carrying out a flow test.
Sombrero is located in Lea County, New Mexico, a prolific oil and gas producing region along the northwest Shelf of the Delaware Basin.
Typical wells in the area have produced between 50,000 barrels to over 1 million barrels of oil over their life.
Otis is paying A$200,000 for reimbursement of costs for leasing acreage, geology, geophysical and engineering work and will also pay 6.67% of the costs for the next two wells, or about $200,000 each, to earn a 5% stake in the Sombrero project.
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