Reabold Resources plc (LON:RBD), the AIM investing company which focuses on investments in pre-cash flow upstream oil and gas projects, has announced an update regarding its operations in California.
· VG-6 well on West Brentwood tested at 350 mscf/d and now on permanent production
· New play at West Brentwood field opened up, providing additional follow on targets
· Gross oil production across Reabold California of 50,286 barrels of oil equivalent between July and December 2019 (Reabold 50% equity interest)
· Net revenue to Reabold from hydrocarbon sales in California of USD 1,349,000 between July and December 2019
· Estimated cash operating cost per barrel of oil equivalent of $13
Further to the Company’s announcement of 6 January 2020, Integrity Management Solutions (“IMS”), contract operator of Reabold’s California operations, has successfully tested the VG-6 well. VG-6 lies within the West Brentwood licence, in which the Company has a 50 per cent. working interest. The well tested at 350 mscf/d and has been put onto permanent production. Gas produced from VG-6 is being sold utilising the existing pipeline infrastructure constructed by Reabold and its partners in California, IMS and Sunset Exploration.
VG-6 was designed to test a new geological horizon at West Brentwood, the Third Massive, different from the Second Massive which is the producing horizon for the VG-3 and VG-4 wells. Success at VG-6 has therefore opened up a new play on the West Brentwood field and therefore additional follow on targets.
Oil production across Reabold’s California licences, being West Brentwood and Monroe Swell, in which Reabold has a 50 per cent working interest, for the period from 1 July 2019 to 31 December 2019 was 50,286 (gross) and 25,143 (net) barrels of oil equivalent (“boe”). Reabold’s net revenue generated from the sales of hydrocarbons in California over the period was USD 1,349,000 (USD 1,079,000 net of royalties). This equates to a realised price of $53.7/boe ($42.9/boe net of royalties). The estimated cash operating cost per boe was approximately $13.
Stephen Williams, Reabold Resources co-CEO, commented:
“We are delighted to have drilled our fifth successful well in California and to see strong rates of production from a previously untested horizon. Success at VG-6 has unlocked a new play with more running room at West Brentwood than we had previously anticipated.
“The excellent economics of our operations in California are evident from the high gross profit margin we are delivering for minor expense. With the addition of VG-6, production is set to continue to increase through 2020, following a strong 2019 where we added incremental wells and grew our income profile.”