(MENAFN- ProactiveInvestors - Australia) Otis Energy (ASX: OTE) could add a new revenue source soon with completion and testing of the first well at the Charro Oil Exploration project in Lea County, New Mexico, expected soon.
The Paddy 20 State-1 well was drilled to a total depth of 2300 metres to test the Paddock/Blinebry formations.
Wells targeting this formation have average gross reserves of between 110,000 and 125,000 barrels of oil equivalent.
Additional reserve potential may be present in the deeper Abo, Wolfcamp, Cisco, Atoka and Morrow formations.
Otis had paid US$5000 for reimbursement of past costs for acreage, geology, geophysical as well as engineering work and is paying 7.33% of the drilling cost of Paddy 20 State-1 to earn a 5.5% working interest in the project.
Expected costs to drill, complete and equip a well with facilities are about US$115,000 per well net to Otis.
Participation in further wells will be made on a well-to-well basis with minimal projects costs.
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