AUSTIN Exploration will begin tests after its drilling intersected a significant 790 feet column of oil in the Pierre formation at the company’s flagship Pathfinder project in Colorado.
This was evidenced through both the drill cuttings and on the drill string which, when returned to surface, was saturated and dripping in crude oil, Austin said.
The crude oil has a green colouration which is the same colour/type of oil that has been reported in neighbouring oilfields, which have produced more than 15 million barrels of oil from the Pierre formation.
Production facilities, which include a pump-jack, tank batteries and flow lines, have been ordered and testing of the well will begin shortly to analyse its production capabilities.
Testing of the well is expected to take about one month to complete.
Austin named the Magellan 1 well, which the company said has been officially recorded with the Colorado Oil and Gas Conservation Commission.
Austin chief operating officer Tim Hart said the company had been de-risking its exploration which led them to this well.
“To see this much oil at this early stage is a great sign and indicates that a significant hydrocarbon system is present and certainly gives us a great deal to be optimistic about,” Mr Hart said.
Austin plans to provide further updates on drilling and well testing activities at Pathfinder in the near future.
The company announced in June that it planned to drill another two high impact wells on the Pierre formation in June and July, with Austin chief executive Guy Goudy saying it was prudent to carry out a more extensive exploration and development program.
“Our focus now is drilling the next two wells in quick succession then moving to flow testing on all three wells,” he said.
“With the potential for approximately 350 wells at Pathfinder, Austin’s true value is only just being realised.”
Austin raised $1.7 million through a placement to fast track the drilling program, with 200 million shares issued over two tranches.
The placement was priced at 0.7 cents per share – a 75 per cent increase on the company’s rights issue, completed in May.