AusTex Oil Limited (ASX:AOK) Operations Update in Kansas and Oklahoma
Sydney, Oct 18, 2011 AEST (ABN Newswire) - AusTex Oil Limited (
ASX:AOK) (PINK:ATXDY) is pleased to provide the following update on operations in Kansas and Oklahoma.
Ellsworth Project - 3,000 acres - Kansas
AOK 50% WI 38% NRI
Mollhagen #8 Well
Castle Resources Inc. (CVE:CRI), as operator, reports that drilling on the Mollhagen #8 well successfully reached TD of 3,309 feet. Electronic logs and samples obtained during drilling confirm the presence of producible hydrocarbons over two intervals in the Arbuckle Limestone between 3,175 feet and 3,237 feet.
Logs indicated 11 feet of net pay with an average porosity of 28% and resistivity of 50 ohms. Casing has been set to 3,308 feet and the well is to be completed for production. Completion operations are expected to take between 2-3 weeks and the well will be production tested.
Background
The 3,000 acre Ellsworth Project is located in Ellsworth County, Kansas. The leases are on the Central Kansas uplift and are surrounded by historical and current producing oil fields. Production in the area has been prodominantly from the Arbuckle Limestone from within the first porosity break. Recent drilling activity is focusing on deeper breaks within the limestone with up to 5 different sections being identified as potential oil bearing zones.
Offset wells to the north of the Mollhagen #8 drilled in recent years have cumulated production in excess of 75,000 barrels of oil per well. With an estimated completion cost of less than $400,000 per well the wells have a potential to deliver solid economics with finding and development costs of less than $10 per barrel of oil.
With the current resurgence in midcontinent oil exploration and development, companies are targeting the three (3) known producing limestone formations using modern drilling, completion and lifting methods. These improved technologies are showing increased recovery rates with very good rates of return on investment. During September 2011, Royal Dutch Shell announced their re-entry into Kansas with renewed exploration and development programs scheduled in 2012.
AOK holds interests in approximately 70,000 acres of oil and gas leases in Kansas in partnership with Castle Resources Inc., as operator, with ongoing exploration and development.
About Australian Oil Company Limited
Australian Oil Company Limited (ASX:AOK) (OTCMKTS:SGCSF) is an Australian-based energy company focused on under-explored, recently over-looked, world class oil and gas opportunities near under-supplied markets. The Company is currently focussed on conventional oil and gas exploration and production in the Sacramento Basin in California. Australian Oil has a portfolio of natural gas and oil producing wells in addition to prospects and discoveries at various exploration and appraisal stages. AOK is in the process of evaluating the acquisition of oil and gas producing and exploration assets to enhance the Company's strategic needs and deliver shareholder value.
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