Mr. Tony Blancato reports
JERICHO OIL ANNOUNCES STACK WELL RESULTS TARGETING OSAGE FORMATION
Jericho Oil Corp.'s Oklahoma Stack joint venture has brought on-line a successful test well of the Osage formation within its northern Stack acreage position. After more than six months of extensive geological and geophysical work, along with methodical acreage accumulation, and a strategic Osage formation test well, the company is excited to further delineate and develop the Stack joint venture's nearly 16,000-acre (net) position in the northern Stack.
The Swordspear 23-10-15 1H well in SEC 15 T23N R10W is located within the Stack joint venture's farm-in acreage (announced in January, 2018) located on the Major-Alfalfa county border, the northern boundary of the Oklahoma Stack play. The Swordspear, after 30 days on an electrical submersible pump (ESP), is producing at an average rate of 400 barrels of oil equivalent per day (61 per cent oil). Osage formation wells commonly take 60 days to 100 days from the start of first oil to reach peak initial production. As such, the company is highly encouraged due to elevated bottom hole pressure on the producing wellbore relative to expectations, often a key determinant for higher-producing rates over time. The most recent daily production reading is over 500 barrels of oil equivalent per day.
The Stack joint venture owns a 47.5-per-cent working interest in the Swordspear. Current ultimate recovery projections place the potential rate of return at greater than 50 per cent (assuming $65 per barrel/$3 per million cubic feet and $5-million completed well cost). The northern Stack position was accumulated at very attractive per-acre rates and represents hundreds of future drilling locations at compelling economics.
Due to the Osage formation test well success, the Stack joint venture has elected to participate in its second Osage formation well (Trebuchet 21-23N-10W No. 1H) within its northern Stack footprint, further delineating the company's acreage position. The well has been spaced and pooled, with a preliminary spud date in late August. Critically, surrounding activity continues to pick up just south of the company's position in Major county, with XTO Energy (an Exxon Mobil corporation) having just filed to drill two extended laterals targeting the same Osage formation prevalent through the Stack joint venture position.
Brian Williamson, chief executive officer of Jericho Oil, stated: "We are incredibly encouraged with the early results of the Swordspear, successfully testing the Osage, proving the extent, both geographically and geologically, of the formation in the northern Stack play of Oklahoma. First-mover advantage in the northern Stack has allowed our company to assemble thousands of acres at very attractive per-acre prices, and we look forward to continuing to delineate and develop our asset base to drive production growth and strong risk-adjusted returns for our shareholders. We are also excited to see large majors like Exxon begin to develop their acreage position just south of our development wells."
The company's 2018 development program, leveraging its recent findings and successes, will focus on the continued delineation of its acreage footprint for both the Meramec and Osage formations, and adding tuck-in acquisitions that complement its Stack acreage footprint.
About Jericho Oil Corp.
Jericho Oil is focused on domestic, liquids-rich unconventional resource plays, located primarily in the Anadarko basin Stack play of Oklahoma. Jericho's primary business objective is driving long-term shareholder value through the growth of oil and gas production, cash flow and reserves. Jericho has assembled a 55,000-net-acre position across Oklahoma, including an interest in approximately 16,000 net acres in the Stack play.
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