Nostra Terra says Fouke 2 production rates have exceeded expectations
(NTOG ) said production rates at the Fouke 2 well located at the company’s Pine Mills oil field in east Texas have greatly exceeded internal expectations.
Nostra Terra, an international oil & gas exploration and production company, holds a 32.5% working interest in Fouke 2 which since its completion and testing has come into production.
Fouke 2 was completed in two reservoir sections within the Cretaceous Woodbine Formation and then tested and flowed at a rate of 145 bopd over a 24- hour period with a 0% watercut.
The well has now been placed into continuous production and oil sales have commenced.
The production rate has exceeded that of the offset Fouke 1 well by 77% which has been limited by field rules (allowable) to 82 bopd per well - for more than a year the Fouke 1 well was producing oil at this allowable rate without decline and had not produced any water.
As a result of the past performance of the Fouke 1 well and the test rate of the Fouke 2 well, the operator said it plans to request a substantial increase in the field allowable rate so that both wells can be produced “at much higher and more efficient rates,” the company reported.
Nostra Terra expects a decision to be made later this year. During the interim period, the operator said it plans to produce each well at c.140 bopd, - that’s above the current allowable cap - in order to obtain sufficient technical information to support the increased field allowable.
Following the completion of the Fouke 2 well, Nostra Terra anticipates a substantial increase in average monthly net operating cash flow due to the increased production from both wells as well as recent high oil prices. The Company is anticipating that free cash flow for the remainder of the year will be in excess of original internal budget forecasts as a result.
Meanwhile in West Texas, Nostra Terra’s Grant East #1 well, in which it holds 100% working interest, was fracture stimulated last week and is being completed this week. Ongoing work on the production facilities which is now underway is expected to be finalised in the near term.
Commenting on this morning’s results, Matt Lofgran, Nostra Terra’s Chief Executive Officer, said: “The Fouke 2 production will have a very positive impact on our cash flow. Given the performance of these wells we anticipate that a substantial allowable increase will be approved which will result in a further step change increase in our cash flow performance.”
Addressing shareholders, he added: “Finally, I am looking forward to the results of the Grant East 1 completion and simulation activity concurrent with the completion of the field facilities.”
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