Jericho Oil Corp.'s (JCO:TSX.V; JROOF:OTC) STACK joint venture will commence the drilling of its second Osage formation well, the Trebuchet 21-23N-10W 1H, within its northern STACK acreage position further delineating the nearly 16,000 net STACK acres, said the company in a news release.
"This will be Jericho's third well drilled in the STACK play in 2018 and second in the Osage formation," stated the company. "This second Osage formation well follows the successful completion of the Swordspear 23-10-15 1H well located within the STACK JV's farm-in acreage (announced January, 2018) located on the Major and Alfalfa county border, the northern boundary of the Oklahoma STACK play. The Swordspear well, after 45 days on an electrical submersible pump (ESP), continues to produce at an average rate over 400 oil-equivalent barrels (boe) per day (55% oil). Osage formation wells commonly take 60 to 100 days from the start of first oil to reach peak initial production with the Swordspear benefiting from a shallow initial decline rate."
Surrounding permitting and drilling activity continues advance around the STACK JV's position in Major County from both public and private operators.
"New assignments, per public Oklahoma State records, for leases in the Northern STACK area, have increased 1,800% year over year from July 2017, to June 2018, demonstrating the increased focus on pushing the northern boundary of the STACK play of Oklahoma," stated the company. "Following on this growing interest in the Northern STACK, Alta Mesa Resources (AMR, through its Kingfisher Midstream subsidiary) recently announced plans to significantly expand its mid-stream system to service Major County and its increasing level of drilling activity with a new high-pressure pipeline for oil, water and gas. The capital commitment by Kingfisher Midstream affirms the positive well results the STACK JV and others are experiencing in the area."
The STACK JV owns a 47.5% working interest in the Swordspear and a 48% working interest in the newly drilled Trebuchet, reported the company.
"Current ultimate recovery projections place the potential rate of return at greater than 50% (assuming $65 per barrel, $3 per thousand cubic feet and $5 million completed well cost)," noted Jericho Oil. "The Northern STACK position was accumulated at very attractive per acre rates and represents hundreds of future drilling locations at compelling economics."
"We continue to be 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," stated Brian Williamson, chief executive officer of Jericho Oil. "First-mover advantage in the Northern STACK has allowed our company to assemble thousands of high-quality acres at very attractive per acre prices. We have quickly moved to commence drilling on our second Osage well, hoping to further delineate and prove the vast resource available in the Northern STACK," adding, "we are excited to see significant investments being made by midstream partners looking to capture the growth in drilling activity in Major County."
Jericho's director of geology, Shane Matson, noted: "The collaborative nature of many of the Northern STACK participants is only going to serve to produce better and more consistent results across the play. The various hydrocarbon benches within the Northern STACK have been tested productively for years and are a great match for current day horizontal development techniques."
The company's 2018 development program 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, according to the company.
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