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Golden Gate Petroleum to increase U.S. oil production

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Golden Gate Petroleum (ASX: GGP) will mark an increase in its production and revenue after the Hensarling-1 well in Louisiana was placed on jet pump.

The well is currently producing 390 barrels of oil per day with the operator expecting to sustain production rates at between 350 and 400bpd.

Golden Gate has a 3.99% working interest in the well.

Hensarling-1 had flowed at an initial rate of 240bpd in July with production expected to stabilise at between 330 and 370bpd.

Hensarling-1 has estimated post-drill gross reserves of 952,000 barrels of oil in the Cris R II & III reservoirs. The well is producing from the thicker Cris R III following which the overlying Cris R II will be completed for production.

Analysis

With a 3.99% working interest (or about 3% net revenue interest) in Hensarling-1, Golden Gate’s share of production could range between 13.9bpd and 15.9bpd (10.5bpd and 12bpd) of oil, compared to the average of 5.8bpd in the two weeks to 31 August 2013.

At a discount on current West Texas Intermediate crude prices, this could generate revenue in the range of $84,000 to $95,800 to its quarterly revenue.

Golden Gate had revenue of $721,000 in the quarter ended 30 June 2013.

 

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