Italian oil and gas group Eni SpA (E) declared that it has recorded high early production rates in its shale oil exploration project with U.S. group Quicksilver Resources Inc. (KWK) in West Texas as against the rates in this part of the Delaware Basin.
Both the companies aim at jointly evaluating, exploring and developing the unconventional oil reservoirs in the southern portion of the Delaware Basin, located in the Pecos County, West Texas about 700 kilometers north west of Houston.
The first horizontal well, Stallings 1H, was completed in a 2,900 feet horizontal section at a vertical depth of 7,400 feet. Currently, it is producing on a restricted choke at a rate of 750 barrels of oil equivalent per day, of which oil is 90%. The well is expected to commence production at the beginning of September.
Located 4.5 miles north of Stallings 1H, Mitchell 1H is the second exploration well currently being drilled by the Eni-Quicksilver joint venture. Both the wells target the same reservoir.
The exploration agreement between Eni and Quicksilver covers an area of about 52,500 acres. Quicksilver, the operator and Eni both own a working interest of 50% each in the project.
In the U.S., Eni has stake in 200 leases in the Gulf of Mexico and 530 leases in unconventional plays (shale gas and shale oil) onshore Texas. The company also owns interests in 100 leases in the North Slope of Alaska, including a stake of 100% and 30% in Nikaitchuq and the Oooguruk oil field, respectively.
Eni's current production in the US exceeds 100,000 barrels of oil equivalent per day, 75% of which is operated.
At present, Eni carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same industry include Weatherford International plc (WFT) and Sunoco Logistics Partners L.P (SXL). Both these stocks sport a Zacks Rank #1 (Strong Buy).