Permex Petroleum Corp C.OIL

Conversion of vertical wells to horizontal and / or laterals

[nozzpack]

This is where signifucant production gains can be made particularly in the San Andreus and Spraybury formations.
Drilling costs are about $500 per foot which implies about $5 million for a 10,000 ft horizontal well.

Production varies in the 1000 bod to 4000 bpd.

Costs would be significantly less when a lateral well is drilled from the same pad  as the vertical well.

So, in summary, there are three over lapping production profiles being undertaken here.

The initial production gains, currently underway, will increase production by workover of shut in non producing mature wells , with current 2P reserves just over 20 million barrels of light oil.

Cash flows from these workovers will be used to progressively conduct EOR procedures on these wells, approximately doubling production in the process.

Combined cash flows from the first two production stages will then be used to convert / drill horizontal wells whose production profiles will quickly increase production by 1000 bod or more.

Entraining these three stages, accrued and combined cash flows would make reasonable  annual production reaching 5000 bpd in low cost stages over 2 years .

At each stage, fair value could be expected to double without incurring any debt.

[nozzpack]

I note that in the Permian right now up to 6 wells can be drilled as laterals from the same drilling pad. That number will continue to increase as technology advances seismic precision. Note also that abiotic oil seeps continue to increase Oil in Place for these wells..