Doral Energy Corp. is a domestic oil and gas exploitation and development company. The company’s strategy is to grow a portfolio of under-developed oil production assets with the potential for generating near-term increases in existing production through operational improvements. The company also looks to longer-term development of undeveloped reserves by infill drilling.
Doral Energy announced that the company is immediately taking steps to begin operations to recomplete its Federal S No. 7 well in Eddy County, New Mexico as a Grayburg/San Andres completion. Total cost of this project is estimated to be $250,000. This decision is based on the results of internal Doral engineering and geological evaluations of the wellbore and formations available for recompletion.
Doral plans to first test the San Andres formation prior to completing the well in the Grayburg and San Andres formations. If successful, the company believes the well may be able to produce in the range of 35-50 barrels of oil per day and 25-35 thousand cubic feet of gas per day. Assuming all goes well, Doral Energy’s total daily production from the overall Hanson Energy properties (of which this well is a part of) will increase by approximately 30%.
Regarding the importance of this recompletion, H. Patrick Seale, Doral’s COO and president, stated, â€œIt will provide demonstrated validity of the 11 undeveloped Grayburg-San Andres drilling locations on this leasehold tract, plus another 5 undeveloped locations on our 120-acre Federal X Lease directly north of the Federal S.â€
Mr. Seale went on, â€œTogether these 16 undeveloped locations will develop approximately 686 MBOE (thousand barrels of oil equivalent) of net reserves at a PV-10% value of approximately $9.2 million to Doral based on in-house engineering, which will be subject to third-party review.â€
Further updates are expected in approximately 3 weeks, after the test results on the Federal S No. 7 well are completed.