Exploration & Production | Capital Markets | Private Equity Activity
Earthstone Assessing Options After Disappointing Well Results
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Earthstone Energy Inc. has begun completion operations on its first deep Pennsylvanian test in Cheyenne County, Nebraska.
During drilling operations, the Schmale 34-20 reached a total depth of 6,550 feet and was cased to 6,200 feet in order to more fully test the productive capacity of the well. During completion operations, two zones were tested; one in a Pennsylvanian age interval and one in a Permian age interval. While some oil was recovered, at this time, volumes are not sufficient to warrant building production facilities. The Company and its partners have suspended operations and are assessing further actions which could include further stimulation to existing zones, testing additional zones or plugging the well. The Company expects to resume operations in the next thirty days.
Earthstone is the Operator of the well and has a 45% working interest in this venture. The remaining ownership in this project is held by unrelated, privately-held, third parties. As previously disclosed, the Company has acquired approximately 70 square miles of 3D seismic data and 30,000 acres of leasehold in the area; primarily in Cheyenne County.
Ray Singleton, President of Earthstone, commented: "It is hard to believe that a formation with that much porosity would give up such a small amount of fluid. We continue to work with various service companies in efforts to understand and overcome this challenge. Regardless of the ultimate outcome of this first well, the knowledge and data that we gain will refine our understanding of the geology and geophysics in these deeper formations. The Company still anticipates drilling one or two more wells over the next 18 months."