Brookside Energy's Orion JV set to begin workover in SCOOP Play after closing second acquisition

Brookside Energy Ltd (ASX:BRK) and Stonehorse Energy Limited's (ASX:SHE) Orion joint venture is about to begin workover operations after closing the second producing property acquisition opportunity in its first two months of operation. The second well acquired by the Orion JV, Mitchell 12-1, is in Brookside’s Jewell drilling spacing unit (DSU) within SWISH AOI in the southern part of the SCOOP Play in Oklahoma's prolific Anadarko Basin. Orion JV was formed by the partners in mid-June to target mature long-life production assets with very low terminal decline and upside that can be unlocked from remedial workover activity and/or unexploited or underexploited behind pipe or deeper productive zones. “Momentum building” Brookside managing director David Prentice said: “It is fantastic to see the momentum building in the joint venture. Two acquisitions closed in two months is a very strong start. “We are looking forward to keeping our shareholders updated as we move the workover rig onto the location and with initial production results as these come to hand.” Workover operations will include inspection and repair or replacement of both surface and downhole production equipment as well as a 'clean-up' of the perforated interval (Sycamore Formation) and finally swab testing and planned restoration of production. “Cashflow accretive” A successful workover is expected to deliver a rate of return in the mid 30% range and achieve payout in around 2.5-years (inclusive of acreage acquisition costs). The costs associated with the acquisition of the well and the workover will be met by the JV partners on a 50:50 basis in accordance with the terms of the agreement. Stonehorse managing director David Deloub said: “Stonehorse is delighted to close the second of a planned pipeline of producing property acquisitions under the Orion Project Joint Venture. “Not only are we expecting this acquisition to be cashflow accretive on completion of the planned workover of the well, it also brings with it the added benefit of securing held-by-production acres in our current area of focus.” Activity map, Swish AOI Scoop Play Anadarko Basin, Oklahoma. The Mitchell Well Production records show that the Mitchell 12-1 well has produced almost 224,000 barrels of oil equivalent (around 30% oil) since inception and Black Mesa Energy’s analysis shows around 90,000 barrels of oil equivalent (15% oil) remaining to be produced. Successful restoration of production in the Mitchell well, when added to the recently announced successful workover of the Newberry well, will provide the opportunity to hold up to 160-acres in the Jewell DSU by production. The Sycamore Formation, the primary target zone for the Jewell DSU, is delivering outstanding sustained productivity in offsetting wells, including from the Flash 1-8-5MXH well, which is around 3-miles west of the Jewell DSU and produced about 390,000 barrels of oil equivalent in its first eight months of production. Additional acquisition targets The Orion Joint Venture is continuing to work up a pipeline of opportunities. Operating partner Black Mesa continues to work up additional acquisition targets within the SWISH AOI and the wider southern Anadarko Basin area. Prentice said “The Black Mesa team is continuing to identify opportunities and importantly bring these to close quickly. “We are delighted that we have been able to add the Orion Project Joint Venture as another important pillar of our business model.”