Doral Energy Corp. (OTCBB:DRLY) recently announced updates on the Company's recent operations on two projects currently underway on its oil and gas properties in Eddy County, New Mexico: recompletion of Doral's Federal S No. 7 well as a Grayburg/San Andres completion; and improvement of waterflood operations in the West Artesia Grayburg Unit.
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Doral Energy has undertaken operations on its Federal S No. 7 well (formerly known as the Mustang 28 Federal No. 1 drilled by Anadarko Petroleum in 2001) to recomplete it as a Grayburg/San Andres oil producer. Doral Energy has lease rights to a depth of 4,000' on the 240-acre Federal S Lease located approximately 0.5 mile south of
To date, the Company has successfully re-entered the well and set two (2) cast iron bridge plugs to abandon the Paddock completion tested by the previous operator. Doral has also run casing inspection and cement bond logs to confirm the operational integrity of the wellbore for recompletion and production. A set of modern cased-hole logs has also been run over the interval from 1,500'-4,000', and the Company's engineers and geologists are evaluating these logs to select perforation intervals for testing and completion in the Grayburg/San Andres formations. Doral plans to perforate and test the well next week, properly stimulate the well as required, and begin production. When asked to comment on the work to-date, Patrick Seale, Doral Energy's President and Chief Operating Officer, stated, "We have been very encouraged by what we have seen so far in these recompletion operations. We have experienced some delays due to scheduling and bringing in equipment, but we have taken the steps necessary to properly evaluate the well and ensure that the formation intervals selected will be the best for optimizing oil and gas production rates from the Grayburg/San Andres formations. We will keep our shareholders informed when more information is available."
The West Artesia Grayburg Unit ("WAGU") is a 640-acre waterflood unit in Eddy County, NM, owned and operated by Doral Energy, which currently has 16 producing wells and 7 water injection wells. The WAGU is surrounded by 5 adjacent Doral Energy leases containing 240 acres and 9 producing wells, bringing the WAGU area totals to 880 acres containing 25 producing wells and 7 water injection wells. The performance of waterflood and production operations on the WAGU have been below optimum for the last several years, primarily due to the lack of water injection volumes and downhole pump performance. Doral is currently working to improve and expand WAGU waterflood operations initially focusing on improving conformance of existing injectors and producers. Doral Energy has recently completed a preliminary report from a continuing geological study of the WAGU area being conducted by the Company's geologists and engineers. Based on the study results to-date, Doral Energy recently added 130' of perforations (260 shots) over the unitized Grayburg interval in the WAGU #4 WIW, a water injection well in the WAGU. Prior to this operation, a water injectivity test on the WAGU #4 failed to inject any water into the Grayburg formation at 600 psig surface injection pressure. After perforating, the well was acidized with 2,000 gallons of 20% HCl acid, using 2,000 pounds of rock salt during the acid job for diversion. After the acid job, a water injectivity test on the WAGU #4 WIW resulted in a water injection rate of 6 BPM (barrels per minute) at 2,000 psig surface injection pressure, or an equivalent daily water injection rate of 8,640 barrels of water per day. Doral Energy has also entered into a contract with an offset operator to supply produced water to Doral for injection into the WAGU waterflood, with a contract fee per barrel payable to Doral. The offset operator is currently delivering 400 barrels of water per day to the WAGU, expandable to Doral's ability to handle injection into the WAGU injection wells. Doral plans to continue working on the WAGU injection wells to increase water injection capabilities while optimizing producing wells in order to increase WAGU oil production and ultimate recovery. Commenting on the results of the WAGU #4 work, Marty Bloodworth, Doral Energy's Vice President of Operations stated, "We were very pleased with the increased water injectivity of the WAGU #4 after adding the additional perforations over the Grayburg formation. This confirmed our belief that the Grayburg sands were capable of taking significantly higher water injection volumes than the injection wells were demonstrating. These higher injection volumes in conjunction with the larger water volumes now available to us under our new contract should allow Doral to improve the conformance of the WAGU waterflood and increase oil production."
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