Reabold Resources' VG-6 to unlock new play at West Brentwood
London-listed has successfully drilled its fifth well, VG-6, unlocking a new play at its West Brentwood licence in California.
The investor of upstream oil & gas projects said that Integrity Management Solutions, the licence’s contract operator, had tested the VG-6 well at 350m standard cubic feet per day and that it has now been put onto permanent production.
VG-6 was designed to test a new geological horizon at West Brentwood, of which the company has a 50% working interest in.
This horizon is referred to as the Third Massive and is distinctive from the Second Massive which is the producing horizon for the VG-3 and VG-4 wells.
“Success at VG-6 has unlocked a new play with more running room at West Brentwood than we had previously anticipated,” said Stephen Williams, Co-CEO of Reabold Resources.
Shares in Reabold Resources were trading flat at 0.62p during Wednesday trading.
The company said the gas produced from VG-6 is being sold using the existing pipeline infrastructure constructed by Reabold and its partners in California, IMS and Sunset Exploration.
For the period July 2019 to December 2019, oil production at Reabold’s California licences, which includes both West Brentwood and Monroe Swell, was recorded at 50,286 (gross) and 25,143 (net) barrels of oil equivalent.
Net revenue for the same period as a result of hydrocarbon sales stood at $1,349,000, with an estimated cash operating cost per barrel of oil equivalent of $13.
"The excellent economics of our operations in California are evident from the high gross profit margin we are delivering for minor expense,” added Williams.
Following a strong 2019, the company believes it will see increased production throughout 2020 as a result of the additional VG-6 well.
The cost of the VG-6 well is expected to be fully funded from the revenue generated by Reabold's California business, as outlined in a previous December 2019 statement.
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