The company is due to receive its initial revenue payment in mid-August. The redevelopment work involved drilling a new horizontal section, extending some 1900ft from the original vertical wellbore. Positive indications of producibility were encountered within days of re-entry, and the well was placed on production in early June.
While Austin Chalk wells are characterized by relatively steep decline curves before stabilizing at lower production volumes, the initial flow rate from the new section exceeded expectations at just under 1000 barrels of oil per day and 800,000 cubic feet of natural gas.
The flow rate has subsequently followed the anticipated decline curve, but the well remains free flowing and not yet requiring artificial lift. As a result, the total redevelopment costs of approximately $890,000, including Nostra Terra’s share, have already been fully recovered.
The well is expected to remain profitable, albeit at lower production volumes, for several years. In addition, there is a possibility of drilling a second horizontal section into the lower ‘A Zone’ of the formation.
