US Oil & Gas PLC waiting to start new drilling in Nevada

What it is doing

US Oil & Gas PLC (USOP) has said it believes well drilling in the fourth quarter of 2020 remains a reasonable expectation, and it has finalised plans for the programme as it awaits regulatory approval.

The company plans to drill the Eblana-9 well, at Railroad Valley in Nevada, as a straight hole with no deviation, down to a target depth of 5,300 feet. It also aims to test three potential producer zones of interest.

Once drilled, it is the company’s intention to carry out a drill stem test to determine if the well is likely to produce at commercial rates.

The company noted that the purpose of the tests will not be to maximise flow rates but to determine the likelihood of commerciality and the viability of long-term production.

“While awaiting the award of the permit to drill Eblana-9, the company has finalised its drilling and well test programme,” said US O&G chief executive Brian McDonnell in a statement.

“Operations have been carefully planned for maximum efficiency and, above all, to produce the high quality, independently managed data we need to make the right decisions about the potential of the well and the next steps to take.

“As always, the drill bit will decide, but we believe we are fully justified in having high hopes for a commercial well. If that should happen, we are positioned to move rapidly ahead with production testing and further field development.”

In regard to permitting the company noted that the Nevada Bureau of Land Management (BLM) has intimated that the period for public comment on the draft Eblana-9 environmental assessment will end on October 30.

The company noted that any issues raised by the public will be raised with the company and addressed by the BLM. The company added that it expect the process will proceed efficiently, allowing the permitting process for Eblana-9 to move to completion.

Immediately upon award of the permits the company intends to finalise drill contracts and fix a date for drilling.

Inflexion points

• Firm indications that Hot Creek Valley lease area features a major oil system analogous to that in Railroad Valley
• Targets for additional drilling to be identified and new development proposal submitted
• Listing on a registered exchange