Grand Gulf Energy Pleasant Home Field Acquisition
Perth, Oct 24, 2016 AEST (ABN Newswire) - Grand Gulf Energy Ltd (
ASX:GGE) (the "Company" or "GGE") is pleased to advise that it has entered into a Participation Agreement to acquire a 50% working interest in the Pleasant Home Field, Covington County Alabama. The field includes 4 wells and processing facilities and the lease is presently held by production from 1 well. The field is operated by Gulf Coast Mineral, LLC.
- Acquiring 50% WI in Pleasant Home Field in Alabama, USA by recompletion of 2 existing field wells with potential net recovery of up to 100,000 bbls oil per well.
- An additional development well may have the potential to recover an additional 650,000 bbls of oil gross
- Recompletions to commence forthwith following RST and CBL logs.
Acquisition of 50% WI in Pleasant Home Field
Pleasant Home has produced in excess of 934,000 bbls of oil since 1999. The wells produce from multiple intervals and presently have a number of zones that based on show and log data are interpreted to be oil pay but are yet to be completed for production.
The transaction will take place through a number of steps. The Company will acquire RST and CBL logs in the target wells to confirm the presence of pay and establish the hole conditions. If these data are encouraging, GGE will undertake recompletions of untested zones in two wells with the potential to recover up to 100,000 barrels of oil net per well at flow rates of up to 100 bbls oil per day.
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 bbls of additional oil (gross) may be proven.
RST (reservoir saturation tool) logs use spectrometry to measure elemental concentrations in the reservoir fluids "behind pipe". Oil volumes or saturations can be computed by using the carbon/oxygen ratio.
CBL (cement bond log) logs use acoustic energy to measure the presence and quality of cement behind casing. These data are used to evaluate reservoir zone isolation.
With multiple reservoirs, the potential reserves for the remaining recoverable oil in place on the field is estimated at between 200,000 - 850,000 bbls.
Operational and Economic Upside
Reserve:
- From 200,000 - 850,000 bbls oil
Reserve Upside:
- Column height, number of pays and sand thickness Production rates Up to 100 bbls per day per well Drilling risks 4 existing wells on location, drilling equipment available with easy access to location.
Entry Terms:
- GGE's estimated share of the recompletions for 50% WI of the 2 recompletions is US$350,000. The NRI being delivered is 75%. Entry costs are US$50,000 + A$100,000 of GGE Shares at $0.005.
Contract Terms
- GGE will undertake a RST and CBL type logs on 2 wells (Smak Dixon 31-6 and 31-11), following satisfactory review of the logs the Company will pay US$50,000 to the operator.
- The Company intends to re-enter the Smak Dixon 31-11 initially to assess primarily the 9850 Houston Sand. Following which the Company will recomplete the Smak Dixon 31-6 and assess specifically the 9512, 9424, 9012, 7600, 6150 and 6040ft sands.
- Following recompletion of the first well the Company will have earned a 50% WI 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 initial recompletion the Company will issue US$75,000 of ordinary fully paid shares to the Operator (price will be the 7 day weighted average following release of this announcement).
- Following recompletion of the second well the Company will have earned a 50% WI in the field and all facilities.
- Grand Gulf commits 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.
About Grand Gulf Energy Limited
Grand Gulf Energy Ltd (ASX:GGE) is targeting conventional oil and gas opportunities in the United States. The company listed on the Australian Stock Exchange in February 2006 as Alto Energy International Limited and changed its name to Grand Gulf Energy Limited in June 2007. The name Grand Gulf Energy is derived from the company's operating subsidiary in USA. Grand Gulf Energy has a strong board of directors and management team based in both Perth, Western Australia and Houston, Texas, USA. Grand Gulf Energy is focused on low-risk, conventional oil and gas plays in Louisiana, close to existing infrastructure and close to or within existing oil and gas production. Grand Gulf Energy's strategy is to apply the expertise and new technology (such as 3D seismic) required to deliver a low risk exploration and development portfolio with potentially high rewards. The company is also focused on forming relationships with organizations that can deliver further acquisition and development opportunities.
The company's portfolio of active projects includes the Napoleonville Salt Dome project in Louisiana.
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