(EDITOR'S NOTE: Pryme Energy (ASX: PYM) of Australia has been exploring for oil and gas in Avoyelles Pryme currently has five oil and gas producing projects and substantial exploration acreage south of Simmesport. They are seeking partners to continue drilling wells in Avoyelles.
The Company's immediate focus is the development of a liquids rich Austin Chalk formation exploration and production play, with Eagle Ford formation potential, in its Turner Bayou project in Avoyelles Parish. Louisiana is the fifth largest oil and gas producing state in the U.S.
Oil executives hope lessons learned from the first wells, as well as the experience that new partners will bring in, help make future wells more productive )
Farm Out Arrangements Turner Bayou Project
Pryme Energy Limited (Pryme) and its partners in the Turner Bayou project have established arrangements for farming out of a portion of their project interests with the aim of raising capital and accelerating the continuing field appraisal and development of the project. The Turner Bayou project is located in Avoyelles Parish, Louisiana and is comprised of 25,791 gross (21,617 net) acres of prospective leasehold. Pryme has a 40% working interest in the project.
A brief outline of the Turner Bayou project and regional exploration and production activity accompanies this release. Additional information on the project can be found on the Company’s website.
The arrangements provide an effective structure to attract a substantial industry exploration and production (E&P) company and/or industry financiers as partner(s) in the significant onshore oil resource development opportunity in the Austin Chalk, Tuscaloosa Marine Shale and Wilcox formations which the Turner Bayou project represents.
The arrangements agreed between Pryme and its Turner Bayou partners include:
• The prospective farm-in partner will be offered the right to acquire a reasonable equity interest in the Turner Bayou project area in return for disproportionately funding new well drilling and completion operations. The work program, to be undertaken within a fixed time period, will include drilling and completing wells on prospects adjacent to the existing producing Deshotels 20H and 13H wells;
• If the farm-in partner is an experienced operator with relevant applicable experience it will be offered operatorship of the project. Otherwise a suitably qualified and experienced commercial operator will be engaged;
A successful farm-out as proposed will result in the accelerated drilling and development of wells in Turner Bayou. A number of E&P companies, some with significant experience drilling horizontal Austin Chalk wells, have shown a strong interest in the project.
Should a farm-out not be completed in a timely manner, sufficient primary term on the mineral leases remains to allow for alternate arrangements to be made by Pryme.
“We consider the arrangements to provide a clear and effective strategy that offers the best possible chance for a successful outcome. Pryme is the largest equity owner in Turner Bayou and together with our project partners we control a large acreage position with demonstrated prospectivity for oil. The project area is surrounded by medium to large E&P companies whose focus is not only the prolific Austin Chalk formation but also on the emerging major oil resource play in the Tuscaloosa Marine Shale which is also well represented in Pryme’s acreage,” said Justin Pettett, Pryme’s Managing Director.
“Unlocking the significant value of the Turner Bayou Chalk project can be accomplished by drilling the next wells in this project, implementing a low risk completion technique and bringing the wells online without incident. Having confirmed the commercial production characteristics of wells drilled in Turner Bayou we will continue to drill and build a portfolio of producing oil wells.”
Permitting of the next two wells, the Deshotels 24H and Rosewood Plantation 21H, is underway. Nelson Energy of Shreveport was granted a permit for the The Rosewood Plantation by the state of Louisiana earlier this month.
The Deshotels 24H drill site location and the service road to the Rosewood Plantation 21H well site have already been built. The sites for both wells are adjacent to the initial Turner Bayou wells drilled by Pryme and its partners and are located in the area which recent re-interpretation of the project’s 3D seismic survey has determined to have the highest fracture intensity, and hence oil prospectivity, of the Austin Chalk formation within the project area.