(MENAFN- ProactiveInvestors - Australia) AusTex Oil (ASX: AOK) has started production testing of its second Mississippi Lime horizontal well in Kay County, Oklahoma.
Wireline logs and samples of Hod 19-1N had confirmed the presence of hydrocarbons throughout the 4,000 feet lateral section, which has undergone a successful 20 stage hydraulic fracture stimulation.
Operator Range Resources Corporation (NYSE: RRC) has modelled the horizontal wells targeting the Mississippi Lime to cost about US$3.4 million and having estimated ultimate recovery of up to 600,000 barrels of oil equivalent with 70% liquids.
Based on these estimates, the wells have a NPV of US$7.1 million and an internal rate of return of about 100% with current spot commodity pricing.
Hod 19-1N is the first of up to three wells to be drilled in Section 19 Township 25 North Range 1 East on the western side of AusTex's wholly-owned Snake River Project and is located directly north of the successful Balder 1-30N horizontal well.
Balder 1-30N has produced oil and gas at rates of about 480 barrels of oil equivalent per day.
Horizontal well participation opportunities are being pursued.
AusTex has a 8.4% working interest and 6.7% net revenue interest in Hod 19-1N.
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