Andrew Bell Red Rock Resources speaks to Share Talk in relation to the Shoats Creek Update. We talk about the forward looking working of the main operator and newsflow. We talk about the options that can be exercised at a premium to the market price currently. We have an update on other assets in place including a look at their Jupiter Asset.
Shoats Creek Update
12 January 2017
Further to the announcement of 14 October 2016, Red Rock announces an update in relation to the Company’s investment in the Shoats Creek Field in Beauregard Parish, Louisiana (“Shoats Creek”).
· Lutcher Moore (“LM”) 20 Gas Line Connected – Hydrocarbon Production Not Yet Stable
· Operator Mayan Energy Estimates LM20 Production at 70 barrels of oil per day (“BOPD”) – 14 BOPD net to Red Rock
· LM13 Well Tested for Inclusion in Field Development Program – New Payzones Under Consideration
Shoats Creek Overview
The Company was recently informed as to the latest developments at its investment in the Shoats Creek oilfield in Beauregard Parish, Louisiana. The Operator, Mayan Energy Plc, indicates that it continues to focus on increasing production through the development of multiple oil and gas wells at Shoats Creek to include a combination of new drill wells and reworking of existing wells on the property.
LM 20 Well
The LM20 well has now been reported to be connected to the local gas line, however a variety of down-well factors have kept production levels from stabilizing as desired. The Company expects ultimate production levels to stabilize in the region of 70 BOPD. This will result in 14 BOPD net to Red Rock. Red Rock retains a 20% working interest (“WI”) and 14.4% net revenue interest (“NRI”) in LM20.
LM 13 Well
The LM13 well has been tested with a view to including it in the fields overall development program. A Rok Quad Neutron Log was used to test the LM13 to assess its viability for reentry and workover. This testing revealed two previously unknown pay formations at 2,600 and 2,900 feet respectively.
Mayan Energy reports that these formations had previously been reported as water bearing and that the utilization of modern technology strongly indicates at these formations may be comparable to the deeper Frio Sands formations exploited at twice these depths in other wells in the field, including the LM20. The Company has a 20% WI in the LM13 well.
Additional information will be provided as to developments at Shoats Creek as soon as it is available.
Red Rock Chairman Andrew Bell comments: “Progress at Shoats Creek has been disappointingly slow since our initial investment approximately a year ago. The prior management of then Northcote now Mayan Energy struggled initially with optimizing production of the LM20 and in progressing to drilling the LM21 and LM22 along the schedule originally planned.
Delays were evident as senior and field management were radically changed over the summer and autumn of 2016 leaving Shoats Creek development slowed during this period. 2017 offers a fresh start to Mayan and the investors in Shoats Creek and Red Rock intends to work closely with them to ensure progress is both positive and more rapid in new year.
While a relatively small investment compared to our holdings in Jupiter Mines the Board retains its belief that Shoats Creek offers relatively inexpensive cash generative upside to its investors. The Company intends to be active in managing its interests in the project going forward. “
For further information, please contact:
Andrew Bell 0207 747 9990 Chairman Red Rock Resources Plc
Scott Kaintz 0207 747 9990 Director Red Rock Resources Plc
Roland Cornish/ Rosalind Hill Abrahams 0207 628 3396 NOMAD Beaumont Cornish Limited
Jason Robertson 0129 351 7744 Broker Dowgate Capital Stockbrokers Ltd
All information is provided on an as-is basis. Where we allow Bloggers to publish articles on our platform please note these are not our opinions or views and we have no affiliation with the companies mentioned