Shares in Hillcrest Petroleum (CVE:HRH) gushed up Tuesday as it told investors it was poised to restart oil production from the West Hazel oil field in Saskatchewan.
First sales are expected next month (November), the company said.
West Hazel field generated over 200 barrels of oil per day (bopd) before being shut in by the previous operator due to financial distress in 2015.
Initial oil output is expected to be between 150 barrels and 250 bopd, with the potential to increase that to 500 bopd with further and previously unidentified well recompletions and development drilling in 2019.
The immediate reactivation costs are expected to total around $750,000.
Under the terms of Hillcrest's joint venture on the asset, it will pay all reactivation costs to return the field to production to earn a 75% working interest, reverting to 50% stake after reactivation costs are paid back from cash flow.
Hillcrest shares rose nearly 17% in Toronto at $0.035.