Questerre Energy Corp. (OTC: QTEYF; TO: QEC) reported the test results from its fifth horizontal well, the 05-23 well, in the Kakwa-Resthaven area of west central Alberta.
The 05-23 well is about two miles west of the existing producing wells on its joint venture acreage and 7 meters to 100 meters deeper ertically. The well was successfully completed with a seven-stage slick water fracture stimulation in the 1,400 meters horizontal section. The well was tested for a 170-hour period thereafter.
Over the last 24 hours of the production test, the well flowed 815 barrels per day (bbl/d) of condensate and 3.7 million cubic feet per day (MMcf/d) of natural gas against anticipated gathering system pressure of 2000 kPa (290 psi) on choke sizes ranging from half inch to one inch. During the entire test, the well flowed at an average condensate to natural gas rate of 195 bbls per MMcf. The well will be tied into the local gathering system shortly. Questerre holds a 25% working interest in the 05-23 well.
The company also reported that its next joint venture well located at the16-25 well has reached total measured depth of 4,680 meters. Production casing is being run into the 16-25 well and, subject to equipment availability and weather, completion operations are scheduled to begin next month. Drilling time from spud to total measured depth for the 16-25 well took 34 days, 12 days shorter than previous wells on its joint venture acreage.
Drilling and completion costs are demonstrating learning curve benefits earlier than originally expected. Questerre estimates current well drilling and completion costs at less than $8 million. This is a cost savings of 25% of the initial well costs of $10 million. Questerre expects further material savings will be realized in the future through pad drilling and additional efficiencies.
Questerre updated the testing of the 15-01 well, recently designated as the 09-01 well.
A chemical soak and squeeze on the Montney formation was successful in re-establishing gas flows and high pressure on surface. The flow from the 09-01 well included very anomalous hydrogen sulphide rates.
“We were pleased we were able to re-establish high pressure high rate flow from the 09-01 well. The high sour and low liquids rates are unusual and could reflect contribution from another zone. Based on these results, we are reviewing a possible new up-hole gas discovery,” Michael Binnion, Questerre president and CEO, said in the release.
Due to the high pressure and sour gas rates encountered, well control and safety was the main priority during these operations. Furthermore, regulatory restrictions on testing of critical sour wells limit Questerre’s ability to conduct an extended cleanup and flow back for the 09-01 well. Further testing of this well will require critical sour processing facilities and pipelines. Currently there are no such sour facilities in the immediate area. As a result, the 09-01 well is currently suspended as a potential gas producer while the company evaluates options for producing the well and new drilling on this block.
On its joint venture acreage to the north where the company holds a 25% working interest, the operator reported that it has contracted a drilling rig for one year and the next well on this acreage is expected to spud in November.
The operator also reported that equipment installation of the joint central compression and condensate stabilization facility is underway. The facility has a capacity of 15 MMcf/d plus associated liquids. It is designed to address the existing production constraints and is anticipated to be on-stream prior to the end of 2013.
Questerre Energy Corp. is an independent energy company engaged in the exploration and production of non-conventional oil and gas resources in North America. The company is headquartered in Calgary.