Nextraction Energy has commissioned pipeline construction to tie the Noble 6-24 well in the Pinedale Anticline field in Sublette County, Wyoming into existing gathering systems owned by Jonah Gas Gathering (JGG). Construction of the pipeline has commenced and will extend for 900mt across private and federal land.
The up-front construction cost of the pipeline will be carried by JGG and is estimated at $490,000. Nextraction has entered into a gas gathering agreement with JGG that allows for Nextraction to reimburse the construction costs from gathering fees paid to JGG, with a minimum monthly fee of $20,000 until the construction costs, plus 10%, are re-paid.
Nextraction has also entered into a gas processing agreement with Enterprise Gas Processing, a JGG affiliate, to process, strip and recover the liquid hydrocarbons from the natural gas and increase the net value payable to Nextraction’s credit. Long term gathering and processing fees for the Noble 6-24 well are estimated at US$0.66 per mcfg sold.
In mid-February, 2010, the Noble 6-24 well was drilled, logged and production casing was set to a depth of 14,888ft. Nextraction is currently evaluating a 12-21 stage frac proposal and has scheduled the well for completion in late June-early July. With the pipeline in place prior to fracing the well, gas sales can begin upon completion of the well.
At present, Nextraction is also completing its first of four ‘proof of concept wells’ in the Chattanooga shale and conventional reservoirs on its project in the Appalachian Basin, US.