Jericho Oil (JCO.V) has presented its organic growth plan to the market, which will aim to maximize the production rate and cash flows from the 75,000 acres in Oklahoma it jointly owns with a private family office.
A first step will be to reduce the decline rates of the existing and producing wells whilst also returning non-producing wells back to production. As Jericho acquired all of its Oklahoma oil assets from producers which were on the verge of bankruptcy, the company’s thesis the previous operators didn’t make the necessary commitments to keep the oil production at a stable level. Jericho has now analyzed the data from its oil wells and expects to be able to see a bump in its production rate by re-working and re-stimulating the existing horizontal and vertical wells.
Jericho has re-worked three oil wells since December, and this resulted in a production rate increase of 65 barrels per day (on the partnership level) , confirming the company’s expectation to be able to boost the production rate by spending just minimal amounts of money. An additional 3-5 horizontal wells will be reworked during the current quarter, and we’re looking forward to see some (production) updates after the end of the quarter.
JCO is also considering to drill new wells, and even though that will be a bit more expensive, it will also be able to move the needle for Jericho and its private family partner. In a previous report we mentioned the high oil price is actually negative for its acquisition plans, but after seeing the company’s exploration plans for the current year, Jericho could (and will) increase its oil production in an organic way.
Go to Jericho’s websiteThe author has a long position in Jericho Oil. Jericho is a sponsor of the website. Please read the disclaimer
