SDX controls 1,677 net acres in the DeRoen field area of Dawson county. This field was a Mississippian discovery back in 1981, and has produced 2.4 million barrels of oil from 25 Mississippian completions, with an average of 97 thousand barrels of production for all Mississippian completions.
Moreover, the estimated total costs per well to include acreage costs, seismic, drilling and completion are $1.65m per well. Therefore, Senetek expects to pay a total of $495,000 for its working interest in the first two test wells.
In preparation for drilling the initial two wells on the acreage block, SDX acquired all of the available seismic in refining the locations. Additional evaluation of various logs indicated that several additional pay horizons exist within the project area.
These include the upper and lower Spraberry, the upper and lower Gin Sands, the Felken, and the Jo Mill Sands. All of these prospective zones will be evaluated in the process of drilling to the Mississippian horizon.
According to Senetek, 96% of the wells drilled in the DeRoen field were completed as producing oil wells, however 15 of the 24 completions accounted for 91% of the production, indicating the importance of porosity to the productivity of the Mississippian horizon.
Upon completion of the first two wells in the project, which will be drilled on structural highs, it is expected that up to 40 additional drill locations could be identified as offsets.
Howard Crosby, president of Senetek, said: “We are very excited to be working with SDX on this highly prospective project. SDX has a great reputation as a quality oil and gas developer in the Permian Basin, and has a long track record of success.
“We believe that this deal presents an excellent opportunity for us to develop long term cash flow for Senetek, and is a superb entry point for further oil and gas business opportunities in the future.”
