New well spudded in Russia
Shelton Petroleum AB has spudded a fourth well on the Rustamovskoye field in Russia by exercising the option included in the drilling contract of well RS#11. As previously announced, RS#11 shows good flows and is connected to the field’s infrastructure and the sale of oil from the well has commenced. Shelton Petroleum will also conduct a fracking of the well in order to further increase well productivity.
Shelton Petroleum’s ongoing development program on the Rustamovskoye field is designed to balance geological risks and required investments against the financial resources available to the company. The issue of an unconditional convertible debenture to Petrogrand AB gives the company financial flexibility to take the next step in the development of the field.
– We are very pleased with the results of our latest drilling and we are now producing from three of three wells drilled on the Rustamovskoye field. It is therefore positive that we are able to commence drilling of a fourth well within such a short time span. Together with the planned fracking, this gives us a good opportunity to increase the production further and enhance cash flow from the already profitable field, says Shelton Petroleum CEO Robert Karlsson.
The new drillings increase the company’s knowledge of the reservoir characteristics and extension as well as provide opportunities to increase the company’s reserves at future updates.
The company is also analysing drilling data and geological information in order to develop an improved design for new wells. The design will include horizontal drilling, which given suitable geological conditions will provide increased flows and significantly improved well economics.
Shelton Petroleum has received a loan from Petrogrand AB as part of the financing of the drilling of the new well. The loan is intended to be set off against the unconditional convertible debenture to Petrogrand AB.
Fracking is a method of breaking up the rock of the reservoir by inserting fluids with additives under pressure. It allows for oil to flow more freely in the reservoir into the wellbore.
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