Successful Well Development Program Continues in Kansas
Sydney, Aug 13, 2012 AEST (ABN Newswire) - United States focused oil & gas producer and explorer AusTex Oil Limited (
ASX:AOK) (OTCQX:ATXDY) is pleased to update shareholders on its exploration and development activities in North West Kansas.
Melanie #1 - Cooper Project - Sheridan County, Kansas (AOK 53% WI 38 %NRI)
AusTex is pleased to announce that the well operator, Castle Resources Inc., has reported that the Melanie #1 successfully reached TD at 4,600 feet in the Arbuckle formation and has been cased and cemented, and is awaiting completion for oil production. During operations, the well intersected the targeted Lansing Kansas City and Mississippi Limestone intervals along with other formations that classified as hydrocarbon bearing.
A drill stem test was conducted on the "G" zone of the Lansing Kansas City between 3,966 feet and 3,985 feet which indicated a test flow rate of approximately 100 barrels per day along with formation water. Well logs and samples have indicated commercially producible hydrocarbons, and the well is being completed for oil production from the Lansing Kansas City interval.
Mollhagen #8 - Ellsworth Project - Grant County, Kansas (AOK 50% WI 41% NRI)
AusTex is also pleased to confirm that the operator of the Mollhagen #8 has reported that the well has now been connected into a commercial water disposal system and is on pump and producing from the Arbuckle interval. The well is consistently producing 16 Barrels of Oil and 200 barrels of water per day running the pump jack at a slow rate to reduce the chances of coning and could show an IRR of close to 100% in its first year. These lower cost, lower production water-drive wells have minimal risk with an excellent return on investment and deliver a consistent production level with minimal decline over many years.
Executive Chairman, Richard Adrey commented, "The Melanie#1 is the first well to be drilled through the Mississippi Lime interval on our Cooper Project and we are encouraged by these early results. Our plan is to produce oil from the Lansing Kansas City formation, similar to the nearby Clark #1 well, and allow sufficient time for the full analysis of the logs and cuttings taken on the Mississippi Lime interval.
"We are further encouraged with its potential in this area given that Apache Corporation has commenced drilling its first Horizontal Well targeting this play in Sheridan County. This is around 10 miles to the south of our Cooper Project.
"AusTex is also pleased to confirm that the Mollhagen#1 well has been connected into a commercial water disposal system and is now on pump and producing from the Arbuckle formation which further enhances our production profile.
"We are pleased to be strengthening production in Kansas. As we have previously stated, AusTex is committed to growing its production from current levels of 300 BOE per day, and the progress with these two wells in Kansas is further evidence of us achieving this.
"While Kansas presents enormous opportunity for AusTex, and we are committed to an ongoing vertical well development program here, our work at the Snake River Project in Oklahoma is continuing uninterrupted. We look forward to updating shareholders on our progress here in the coming weeks."
View the complete AusTex Oil announcement at the link below:
http://media.abnnewswire.net/media/en/docs/ASX-AOK-689477.pdf
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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