Brookside Energy Ltd (ASX:BRK) and Orion Joint Venture partner Stonehorse Energy Limited (ASX:SHE) have started workover operations aimed at restoring production at the JV's second well acquisition – Mitchell 12-1 Well in the SWISH AOI within Anadarko Basin of Oklahoma, USA.
Operations are underway with a workover rig moved onto the location and this work will include inspection and repair or replacement of surface and downhole production equipment as well as a 'clean-up' of the perforated interval (Sycamore Formation) and finally swab testing and planned restoration of production.
Production records show that the Mitchell 12-1 well has produced almost 224,000 barrels of oil equivalent (around 30% oil) since inception and Black Mesa Energy’s analysis shows around 90,000 barrels of oil equivalent (15% oil) remain to be produced.
Successful restoration of production in the Mitchell well, when added to the recently announced successful workover of the Newberry well, will provide the opportunity to hold up to 160-acres in the Jewell DSU by production.
The Sycamore Formation, the primary target zone for the Jewell DSU, is delivering strong sustained productivity in offsetting wells, including from the Flash 1-8-5MXH well, which is around 3-miles west of the Jewell DSU and produced about 390,000 barrels of oil equivalent in its first eight months of production.
The Orion JV was formed by the partners in mid-June to target mature long-life production assets with very low terminal decline and upside that can be unlocked from remedial workover activity and/or unexploited or underexploited behind pipe or deeper productive zones.
A successful workover is expected to deliver a rate of return in the mid 30% range and achieve payout in around 2.5-years (inclusive of acreage acquisition costs).
The costs associated with the acquisition of the well and the workover will be met by the JV partners on a 50:50 basis in accordance with the terms of the agreement.