Questerre Energy Corp. (
TSX: T.QEC,
Stock Forum) reported on the test results from its fifth horizontal well at 05-23-63-6W6M in the Kakwa-Resthaven area of west central Alberta.
The 05-23 well is approximately two miles west of the existing producing wells on its joint venture acreage and 70 metres to 100 metres deeper vertically.
According to the
Questerre Energy press release, over the last 24 hours of the production test, the well flowed 815 barrels per day of condensate and 3.7 million cubic feet per day of natural gas. The well will be tied into the local gathering system shortly. Questerre holds a 25% working interest in the well.
The company also reported that its next joint venture well located at 16-25-63-5W6M has reached total measured depth of 4,680 metres. Production casing is being run into the 16-25 well and, subject to equipment availability and weather, completion operations are scheduled to begin next month. Drilling time from spud to total measured depth for the 16-25 well took approximately 34 days, 12 days shorter than previous wells on its joint venture acreage.
Drilling and completion costs are demonstrating learning curve benefits earlier than originally expected. Questerre estimates current well drilling and completion costs at less than $8.0 million. This is a cost savings of approximately 25% of the initial well costs of $10 million. Questerre expects further material savings will be realized in the future through pad drilling and additional efficiencies.
Questerre updated the testing of the 15-01 well, recently designated as the 09-01-62-6W6M well.
A chemical soak and squeeze on the Montney formation was successful in re-establishing gas flows and high pressure on surface. The flow from the 09-01 well included very anomalous hydrogen sulphide rates.
"We were pleased we were able to re-establish high pressure high rate flow from the 09-01 well,” said Michael Binnion, President and CEO. “The high sour and low liquids rates are unusual and could reflect contribution from another zone. Based on these results, we are reviewing a possible new up-hole gas discovery."
Due to the high pressure and sour gas rates encountered, well control and safety was the main priority during these operations. Furthermore, regulatory restrictions on testing of critical sour wells limit Questerre's ability to conduct an extended cleanup and flow back for the 09-01 well. Further testing of this well will require critical sour processing facilities and pipelines. Currently there are no such sour facilities in the immediate area. As a result, the 09-01 well is currently suspended as a potential gas producer while the company evaluates options for producing the well and new drilling on this block.
On its joint venture acreage to the north where the company holds a 25% working interest, the operator reported that it has contracted a drilling rig for one year and the next well on this acreage is expected to spud in November.
The operator also reported that equipment installation of the joint central compression and condensate stabilization facility is underway. The facility has a capacity of 15 million cubic feet per day plus associated liquids. It is designed to address the existing production constraints and is anticipated to be on-stream prior to the end of 2013.
Questerre is leveraging its expertise gained through early exposure to shale and other non-conventional reservoirs.
On Wednesday, Questerre was up 8.1% and was trading at $1.34 a share. The company had a market cap of $315.3 million, based on 235.3 million shares outstanding.