DXI Energy Inc. TSX-V: DXI has provided an operational update for its Woodrush project in northeastern British Columbia.
“We are pleased to report that we are in receipt of licences and permits required to mobilize a rig to spud the first of several exploration wells intended to demonstrate high-potential targets delineated by the Q3 and Q4 2017 integration and reinterpretation of multiple 3-D surveys over much of the company’s 13,000-acre leasehold at Woodrush [in northeastern British Columbia]. The commencement of this drilling phase is a very exciting time for the company, and we remain confident in our plan to significantly extend our existing oil pools south and east of the current producing wells and surface facilities while maximizing both netbacks and IRR [internal rate of return]. With $12-million of in-place gathering and production infrastructure and a legacy production profile featuring conventional, light oil pool production, DXI is well positioned to be a highly attractive and most sustainable low-cost producer in Fort St. John,” stated Robert L. Hodgkinson, chairman and chief executive officer.
Woodrush project — timeline
Permit applications for the Woodrush drilling program were approved by the appropriate regulatory authorities on March 9, 2018. DXI has completed the following key steps/commenced final preparation operations prior to the initial well spud:
- The final prestack, depth-migrated 3-D seismic data interpretation has further defined and enhanced the multiple drill targets available.
- The optimal bottom hole locations of the first two wells have now been chosen without the requirement to survey, license or build new access or drill pads, easing the approval process of the British Columbia Oil and Gas Commission (BCOGC).
- An authorization for expenditure (AFE) has been finalized.
- A more favourable drill contract has been signed with Excalibur Drilling, and the rig is ready to commence mobilization from Fort St. John.
Woodrush project — legacy operations
On a historical basis, initial wells at the Woodrush oil field drilled in 2008 and 2010 each commenced production at rates of approximately 500 to 700 barrels per day of light 42-degree gravity crude oil, have produced over 675,000 barrels of oil since discovery and were still producing at a daily combined rate of 300 barrels of oil equivalent per day through Q2 2017. The current production infrastructure, consisting of tanks, separators, line heaters, compressors, pumps, water injection facilities and pipelines, has a production capacity of approximately 2,000 barrels of oil and up to three million cubic feet of gas per day. New discoveries in this location will utilize this existing in-place infrastructure and transportation system to market new production in the most cost-effective manner.
About DXI Energy Inc.
DXI Energy is an upstream oil and natural gas exploration and production company with producing projects in Colorado’s Piceance basin (24,407 net acres) and the Peace River Arch region in British Columbia (13,093 net acres). DXI Energy maintains offices in Calgary and Vancouver, Canada.