Strata-X Energy (TSX: V.SXE, Stock Forum) advanced exploration efforts at the Illinois Basin when the company announced today that it had received approval to drill the 3,800-foot Douglas Fir #1 well to test multiple shallow Mississippian formations in the Basin.
According to the news release, a contractor is currently being sought to expectedly commence drilling in November 2014.
The company controls approximately 70,000 net acres in Illinois which sit atop and adjacent to several giant oil fields. More than 80% of the oil produced in the Illinois Basin came out of the ground long before oil prices climbed over the $2.0 mark in 1972 and was produced without the benefit of modern drilling and completion techniques.
Today's oil prices significantly lower economical oil flow thresholds, and advanced drilling and completion methodologies increase the amount of reservoirs than can now be commercially developed, making the Illinois Basin an incredibly attractive drilling opportunity.
Having only recently embarked on evaluation in the area, the company has already identified over 65 potential drilling locations and expects to identify a multiple of that number in the coming months.
Over the next several months, the company plans to execute a six-well drill program at Illinois Basin with the first wells commencing in November 2014.
Company President, Tim Hoops, commented on the opportunity at Illinois Basin, “The Illinois Basin has been largely over-looked by the mainstream oil and gas industry as they chase after shale resource plays that offer modest returns.”
He went on to explain, “We view Illinois as an area that offers low risk shallow drilling targets with the potential for better returns from much lower capital requirements.”
Then he summed up, “This shallow drilling program will supplement our other large light oil play in the Illinois Basin which has been significantly de-risked with the drilling and completion of the Burkett 5-34 well.”
Strata-X Energy was in the news recently when the company initially outlined details of its vertical well program at the Illinois Basin a little over a week ago.
Currently there are 146.3m outstanding shares with a market cap of $24.1 million.
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