Permex Petroleum Corp (CSE:OIL), the Permian basin-focused junior oiler, aims to lift production in 2019 and begin its San Andres Horizontal well drilling programs in Gaines County, Texas.
It wants to maximize output via enhancing its waterflood work, bringing shut-in wells online, and most importantly by scheduling this San Andres work.
The junior oiler said in a shareholder letter Friday that it also wants to see a strong capital market performance and its share price rise through the continuation of sound operations and marketing.
"A third priority this year is to maximize our total barrels of oil equivalent in daily production for the company. This will put Permex in an organic growth model without external dependencies even at $40 per barrel oil," said Mehran Ehsan, CEO of the company.
Ehsan noted that 2018 had been a tough year for the industry, not least due to a 40% drop in crude prices.
"Since the downturn in prices, only a couple of US shale oil plays have demonstrated the economic resiliency to justify continued investment, drilling and A&D activity," he said. "The Permian in West Texas & South East New Mexico is top of that list by a huge margin."
Positioning Permex as one of the lowest cost (i.e., break-even) basins in a "crude oil world defined by a lower global supply cost-curve was imperative to building long-term shareholder value," Ehsan added.
"Focusing on the San Andres formation within the basin further cements our low-cost break-even position in comparison to higher cost formations in the region, such as Wolfcamps and Bonesprings."
Running through the group's achievements of 2018, he highlighted that daily gross production had increased by around 200% from the fourth quarter of 2017 to the fourth quarter of 2018.
Its acreage position in the Permian increased by 25% from 4Q, 2017 4Q, 2018.
The 2P (proved plus probable) reserves total $142 million, or 9 million barrels of oil equivalent, an increase of 22% year on year, while proved (1P) reserves total $79.5 million or 4.32 million barrels of oil equivalent -- a 72% increase year on year.
Shares in Permex gushed up over 8% on the day to $0.20 each.
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