Vanguard Energy has completed drilling of three new oil wells on the Batson Dome field in south-east Texas, US.
All three wells have been drilled to a depth of approximately 3,000ft-4,000ft and cost approximately $700,000 each.
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Vanguard Energy president Warren Dillard said the wells were financed with a portion of the proceeds from the company’s recently completed convertible note financing.
"The early production rates on the wells are on par with expectations and well above target production standards set by previous Batson Dome wells of approximately 20 barrels of oil per day per well," said Dillard.
The company said the production rates will vary from well to well which are producing from pay zones that are different in size and ultimate recovery rates.
The wells are conventional, vertically drilled wells and will produce oil only.
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By GlobalDataIt utilised data from a 3D seismic survey completed in early 2012 on about half its lease position at Batson to enhance its drilling process.
The company intends to complete the rest of the survey, and said there are more than 50 potential total drilling locations on its current acreage in Batson Dome.
"Although these wells do not have extremely high IP (initial production) rates, generally good wells in this field experience only a slow, gradual decline and they produce at predictable rates for the life of the well," said Dillard.
"This is possible since they produce from multiple zones and we can move up pipe to fresh zones as lower ones deplete. Well economics are still compelling with IRR’s (internal rates of return) between 80% and 100%, which is rare in today’s market.
"We are anxious to complete the 3D seismic survey on our acreage and identify additional potential drilling locations for the field. It is possible that when we get off the salt dome we might encounter much deeper and more prolific production prospects," added Dillard.
Vanguard Energy has also added to its acreage position in the Hull-Daisetta field and will start drilling soon.
