Overview of the Acreage in the United States
1. West Texas Permian Basin
Dynex Petroleum LP, a 100% owned subsidiary of Dynex Energy SA, has entered into a participation agreement with Tidewater Resources of Midland, Texas for a 10% working interest in the Riggan Project, located in Dawson County, Texas. The operator SDX Resources ("SDX") of Midland, Tx controls 1,677 net acres in the DeRoen Field area of Dawson County.
This field was a Mississippian discovery back in 1981, and has historically produced 2.4 million barrels of oil from 25 Mississippian completions, with an average of 97 thousand barrels of production each. The estimated total costs per well, including acreage costs, seismic, drilling and completion, are approx. $1,7m per well.
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.
96% of the historic wells drilled in the DeRoen Field were completed as producing oil wells, however 15 of the 24 completions accounted for 91% of the historic production, indicating the importance of porosity to the productivity of the Mississippian horizon. Upon successful completions of the first two wells in the project, which will be drilled on structural highs, it is expected that up to forty additional drill locations could be identified as offsets.
The first well, McCarty 23 No.2, was spudded on 2 June, 2013, drilled vertically to a depth of 10,600ft into the Mississippian Formation, stimulated with a 2-stage frac job and completed on 25 August, 2013. The well was put into production on 1 September, 2013 and current production levels are positively in line with the expectations for the prospect.