Permex Petroleum Corp (CSE: OIL) announced today that it has begun an oil well re-entry program at two of its oil fields: Bullard and West Henshaw fields.
The goal in its re-stimulation and re-entry program is to boost production at the wells, located in west Texas, Stonewall County and south-east New Mexico, Eddy County.
"Our approach is to target our lowest hanging fruit to increase production. In our opinion, these shut-in wells represent low cost, low risk opportunity for us to increase our current production to targeted levels," said president and chief executive officer Mehran Ehsan.
"These re-entries fall under (Phase One) of Permex's developmental plan which is tiered towards sustainable growth. Once we have maximized output through these re-entries, we will move towards more capital-intensive programs which will provide production scale to the company, these include but are not limited to vertical and horizontal drilling."
The company said it has hired Basic Energy Services (NYSE:BAS) to handle the re-entries and stimulation of the company wells.
The Bullard property in west Texas currently produces from the Tannehill formation at depths of 3,200 feet. The West Henshaw property is located in south-east New Mexico and currently produces from the Grayburg formation at a depth of 2,850 feet.
The stimulation and re-entry of all 33 shut-in wells that the company currently owns is expected to provide the company with an additional 150 barrels of oil in production per day.
The company says it believes a combination of waterflooding, re-entry of all shut-in wells and infill drilling of shallow wells will yield exit rates of approximately 400 – 500 boepd for 2018.
Permex shares were up 11.9% at C$0.47 on Wednesday afternoon.