Norwest, Golden Triangle Energy and operator Miller Petroleum are drilling the prospects at a turnkey cost of US$235,000 per well and earning a 37.5% interest in production from the wells reducing to approximately 29%.
Golden Triangle Energy is the US subsidiary of Alto Energy, a Perth-based shale gas start-up that has established an area of mutual interest with Norwest in the Appalachians.
Norwest and Alto said Miller is a very highly regarded operator which has drilled almost 65% of all the wells in Tennessee, and is an active gas and oil producer in the area.
The wells, targeting the Devonian shale section, were unlikely to flow without fracture stimulation, said Norwest CEO Joe Salomon. Frac jobs were scheduled immediately after each well has been drilled and completed.
“The wells are located in what we believe to be one of the most prospective areas in the Appalachians, and we look forward to having the results of the first well within a few weeks," he said.
"Shallow targets are also known to occur in the area, and if present they will provide additional value that has not been factored into the project economics.”
Norwest and Alto/Golden Triangle have a series of drilling options that occur sequentially and within a short time frame that allow for almost continuous drilling to take place. The area covers some 10,400 acres in which more than 100 wells could be drilled, Salomon said.
