Investors eagerly await flow tests from Austin drilling program
There may be some positive news on the horizon for Austin Exploration (ASX: AKK) with a high impact deviated drilling program on the Columbus #1 well to commence in coming days.
As a backdrop, AKK is an oil and gas company with a portfolio of assets in the United States. The group has a major presence in two of America’s most prolific oil and gas basins, controlling more than 15,000 acres in Colorado in a region known as the DJ Basin.
The company also controls 4000 acres in the Illinois Basin in Kentucky.
Importantly, the company is both explorer and producer with interests in producing oil and gas wells in Colorado, Kentucky and Texas.
Focusing specifically on upcoming developments at Columbus #1, management said on Wednesday that drilling of Pierre formation already showed evidence of hydrocarbons and intense natural fracture zones.
This is consistent with 3D seismic data that has demonstrated a major fracture network capable of holding significant oil reserves. It is also significant that this development has been confirmed by an independent on-site geologist.
As Austin begins to flow test three wells after completion of drilling at Columbus #1 there is potential for market moving news to be released.
What this news may be and when it is released is speculative at this stage, so if considering this stock for your portfolio seek professional financial advice.
The commencement of Columbus #1 is part of a back-to-back drilling program also involving the Magellan #1 and Marco Polo #1 wells with drilling having been completed at the latter two sites.
Management highlighted that its strategy in terms of undertaking a multi well program was designed to significantly reduce drilling costs and maximise operational efficiencies.
AKK is now well progressed with its three-phase three well program with the first stage of sequentially drilling the upper vertical sections of the three wells successfully completed.
Phase 2 is also underway, and this involves sequentially drilling the deviated wellbore sections of the three wells.
The third and final phase is to sequentially flow test the three wells. While management hasn’t provided a timeline regarding results of flow testing there is the potential for share price catalysts to emerge.
AKK is a relatively small player operating in the high risk oil and gas exploration space and as such it represents a speculative investment with no surety regarding the outcome of drilling initiatives. As such, investment decisions should not be based on information contained in this article.