ASX-listed AXP Energy Limited has seen material production gains from a low-cost well re-completion of a single well in the Illinois Basin.
The well re-completion for DPI-2605 has added considerably to gross daily production with the well now steadily flowing about 50 barrels of oil and 300 thousand cubic feet of gas per day.
This represents a significant boost to AXP’s oil production which averaged 307 barrels of oil a day in April and 351 in May.
After well re-completion, the well initially flowed naturally at 310 barrels and one million cubic feet of gas (intermittently) a day, achieving a maximum flow rate of 555 barrels on the second day, however the operations team choked back the flow to manage the high formation pressure and protect the well.
The well is currently on pump and flowing through the production tubing (about 50 barrels a day since 1 June) and well engineering is ongoing to stabilise the well and maximise final production.
AXP is in the process of establishing a sales contract with a local government municipality to sell the gas at a slight discount to NYMEX.
AXP chief executive Tim Hart said the flow rates from DPI-2605 were outstanding.
Hart said: “While the well has delivered very high natural flow rates, we took the prudent decision to choke back the flow while we engineer the well to maximise future performance.
“We will continue to produce at approximately 50 [barrels a day] as this work progresses.
“It should also be noted that just under 40 per cent of the frack fluid, which often inhibits hydrocarbon flow, is still to be flowed back.”
AXP first reported its intention to purse low-cost re-completions on a number of historical drilled and uncompleted wells in the Illinois Basin, with DPI-2605 the first of these opportunities to be realised.
The lease has now been identified as a priority target.
Additional adjacent leases are in the process of being secured over the area that overlays the Salem-Warsaw and Upper Fort Payne formations, as these are common targets for oil production in the region.
Hart continued: “Our portfolio holds considerable untapped potential and DPI-2605 is just one success from an inventory of hundreds of wells that we are still to workover and/or re-complete.
“While we are being opportunistic and in the process of securing more leases in the area to potentially drill new low-cost wells in the future, our immediate priority is to increase cash reserves by undertaking more low-cost, predictable re-completions and workovers across leases tied to reliable transport and processing infrastructure as per out stated growth strategy.”