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Incremental Oil and Gas Ltd beats estimates at Wyoming gas well

Published: 12:30 09 Sep 2016 AEST

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Incremental Oil and Gas Ltd (ASX:IOG) recorded a 5-day average initial production rate exceeding 1,200 MCFD (thousand cubic feet per day) at the Silvertip Field in Wyoming, U.S.

The company’s strategy is to identify and acquire low risk, underperforming oil and gas fields and apply modern technology and expertise to increase production and enhance hydrocarbon recovery.

Significantly, a greater than 400 pounds per square inch (PSI) flowing casing pressure from the new gas well indicate virgin reservoir conditions with excellent flow characteristics.

The share price of the company has reacted favourably to this, last trading about 28% higher for the day at $0.046.

Incremental’s return on investment is expected to be substantial due to higher than expected initial production and lower costs than those forecasted, with a total expenditure under US$35,000.

In addition, infrastructure to capture and transport the gas is already in place at the well which is connected to Incremental’s gas processing plant at the Silvertip Field.

To maximise returns, Incremental strategically timed its work program to coincide with increased gas prices and expected greater gas consumption during the U.S. fall and winter months.

The gas will be transported from Incremental’s gas plant and delivered directly to the purchasers’ pipelines.

Incremental expects the payout for this recompletion procedure in less than three weeks based on current gas prices.

The company has a 100% working interest in the Silvertip Field with a net revenue interest of 82%.

Incremental’s operating revenue for 1H 2016 was US$2.27 million, compared to US$1.62 million in the same period last year.

 

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