Portfolio

Reabold Resources upbeat on recent work in California

By Josh White

Date: Monday 20 May 2019

Reabold Resources upbeat on recent work in California

(Sharecast News) - Reabold Resources announced on Monday that its contract operator in California, Integrity Management Solutions, has informed it that the perforating and swabbing operation at the Burnett 2B and Burnett 2A wells has been completed.
The AIM-traded firm said commercial flow rates had been confirmed at both wells, which were the third and fourth wells in the Reabold California portfolio to achieve that.

Multiple zones were perforated in both wells, with the swabbing runs resulting in oil flow from all zones prognosed to be hydrocarbon bearing.

Pumping units were being mobilised this week, with the final permanent production facilities expected to be in place within the next fortnight, at which point both wells would be put onto permanent production.

Reabold said it would update the market as to the flow rates achieved once the wells were on permanent production.

Both the Burnett 2A and 2B wells had additional reservoir zones prognosed to be hydrocarbon bearing that had not yet been perforated, with the company said it would evaluate the potential to target additional production from those zones at a later date, after gathering initial production data from the wells.

In addition, Reabold said it was planning to drill further wells on the licence area, given that success, with the aim of growing production and cash flow.

Reabold said it had now earned its 50% working interest in the licence, with all future activity to be funded by the company at a 50% paying interest.

At the VG-4 well on the West Brentwood licence, as the firm announced on 29 April, work had started to complete a tie-in to the nearby gas pipeline, to realise revenue from the gas production and to allow VG-4 to produce at less constrained rates.

Integrity Management Solutions was reportedly awaiting an Encroachment Permit from the California Division of Oil, Gas and Geothermal Resources, which was required to complete the tie-in due to the proximity of the pipeline to a public road.

VG-4 had been shut in while that final stage of the works was completed.

At the Doud A area within Monroe Swell, where Reabold was producing from the wells that were worked over last year, production had been curtailed by water ingress at the main production well due to a leak in the casing, the board reported.

Integrity Management Solutions was proposing to rectify the issue with a minor workover, now that testing was complete at the Burnett wells, which was expected to restore the Doud A wells to full production shortly.

From 20 April to 8 May, with VG-4 producing at the constrained rates, cumulative gross production across Reabold\'s California portfolio was 7,484 barrels of oil equivalent gross, with 3,742 barrels of oil equivalent net to Reabold.

That excluded volumes produced through the testing programme at Burnett 2A and 2B.

\"We are very pleased to be able to confirm that all four wells drilled in the California portfolio will soon be in permanent production,\" said Reabold Resources co-chief executive officer Sachin Oza.

\"Flow rates at Burnett have been increasing throughout the testing period as the swabbing takes effect, and we look forward to seeing the sustainable flow rates once the pumping units are in place.

\"In the meantime, we have produced and are selling meaningful volumes out of our existing wells, with the cash flow allowing us to continue to exploit Monroe Swell and West Brentwood to drive considerable, self-funded growth from these assets. With VG-4 soon to be on unconstrained flow, the two Burnett wells coming into production, and the restoration of full production at Doud A, we should see a sharp increase in production in the near term, with additional drilling to follow.\"

Meanwhile, Oza added that operations were progressing \"well\" at West Newton in Yorkshire, with the board said to be \"looking forward\" to receiving initial results shortly.

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