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Northcote Energy to monetise Zink Ranch’s rising gas flows

Published: 05:07 21 May 2014 EDT

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Northcote Energy (LON:NCT) is to monetise additional gas associated with its oil production operations at the Zink Ranch property.

Gas flows have been on the rise at Zink Ranch since the first four of fourteen planned well work-overs were completed.

One well alone, flowing around 60,000 cubic feet per day, doubles the property’s gas volumes at the time it was acquired by Northcote.

As the incremental gas production has not declined, Northcote now intends to installa gas compressor and associated infrastructure to monetise this increased gas production.

Once the oil and gas flows from the wells stabilise, after the work is carried out, Northcote will update investors further.

“A significant increase in natural gas volumes is a positive indicator for future performance as an increase in natural gas volumes should portend an increase in the rate of oil recovery,” chief executive Randy Connally said.

“However, the increase in pressure on certain well bores has made it difficult for us to pump our wells down and get a good test on the oil.  

“We believe that the new steel flow lines we will install next week as well as a compressor to move more natural gas will allow us to get good tests on these wells and this will also support future planned field development at this site, which has a number of high impact development opportunities."

Stefan Olivier, managing director of North American Petroleum (LON:NAP), which has a 30% in Zink Ranch, meanwhile, said: "The decision by the operator to install equipment to recover and monetise the gas produced from the four recompleted wells demonstrates the significant increase in gas production at Zink Ranch. 

“Once in place we will be in a position to establish stable oil and gas production rates for each of the wells. In the meantime, the elevated gas levels seen to date at Zink Ranch bode well for oil recovery at the four wells and I look forward to providing further updates on the performance of these wells and the continued roll-out of our multi-well workover programme."

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