AUT 8.33% 11.0¢ auteco minerals ltd

more good news..

  1. 175 Posts.
    As posted on ADI thread

    This came out on Oil Barrel:

    Sugarkane Remains The Sweet Spot In The Aurora Oil & Gas Portfolio
    These are exciting times for investors in ASX-quoted Aurora Oil & Gas, which is currently cleaning up the Kowalik-1H well on the potentially world-class Sugarkane gas and condensate field in South Texas. The well, which is operated by Texas Crude Energy, is currently producing oil, gas, water and drilling fluids: at the last count, the output was 937,000 cubic feet of gas per day, 321 barrels of oil per day, 14 barrels of water per day plus slugs of drilling mud. The well was shut in on Tuesday to allow the well to be flushed out with a mud cleanout treatment, a procedure that has been successful on similar fields in the area, after which point the company will be able to give a better idea of the sustained production capability of the well and enjoy sales income from the well.

    Aurora has a 20 per cent working interest in the well, which is part of the Sugarloaf AMI project area. This is one of three areas of the Sugarkane gas and condensate field in which Aurora has an interest, the others being the Longhorn Area (Aurora 50 per cent) and the Ipanema Area (80 per cent). This is a very interesting project. Sugarkane, which was discovered in 2006 with the Kunde-1 well and is believed to have the potential to hold the equivalent of several trillion cubic feet of gas, is believed to be a unique Austin Chalk formation with the potential to outclass the performance of classic Austin Chalk fields.

    The newcomer lies some 20 km to the south of the main Texas Austin Chalk formation, home to classics such as the Giddings and Pearsall fields that have produced over 5 trillion cubic feet of gas and 600 million barrels of oil. Although still in the early stages of appraisal, the Sugarkane field is over pressured, has a higher porosity and a higher condensate-to-gas ratio than the classic Austin Chalk fields. Covering over 200,000 acres with potential gross reserves of more than 3 tcf of gas and 700 million barrels of oil, Sugarkane is possibly one of the largest undeveloped gas and condensate fields in North America – and ASX minnow Aurora has a 20 per cent chunk of over 48,000 acres of the 200,000 acre field.

    To date, eight exploration and appraisal wells have been drilled into the targeted Austin Chalk formation since the field’s discovery in 2006, three of which (Sugarloaf-1, Kennedy-1H and Kowalik-1H) lie in Aurora’s areas of interest. This isn’t easy work as operators must drill long horizontal sections through the fractured chalk reservoirs to deliver the best production rates and, as evidenced by the Kowalik-1H well, there often needs to be stimulation and clean-up operations to get the best results. It’s a learning curve to get the technical drilling and completion procedures just right, so every well drilled is valuable in terms of providing more information about what works, what doesn’t and, importantly, just how valuable this resource is shaping up to be.

    Certainly companies working up the 200,000 acre field haven’t been slow to push ahead with appraisal work. Aurora is already drilling ahead with the Weston-1H well, which is currently at a depth of more than 735 feet. The well is targeting the upper chalk interval that has successful produced gas and condensate in three wells in the adjacent acreage and which also gave positive indications while drilling in the Kowalik-1H well. Other operators are also busy appraising this potentially world class resource, with the adjacent acreage currently seeing work on one horizontal and one vertical well with a further six wells being permitted for drilling.

    These wells can be quickly tied into the local production infrastructure (the discovery well, Kunde-1, has been producing since September 2006 in line with expectations). For Aurora’s account, the Kennedy-1H well is producing 0.15 million cf/d and 44 barrels of condensate per day - this isn’t a huge amount but there remains plenty of untapped potential in the well with over 3,000 ft of horizontal section still to stimulate. More will be known about the Kowalik-1H well’s production capability in the coming weeks. And then there’s the prospect of first drilling on the Longhorn and Ipanema AMI project areas, which is expected to get underway in 2009. This promises plenty of newsflow in the months to come.
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