The company has already started a workover program on its 15 existing oil and gas wells and an initial 12 to 16 well CBM drilling program is due to begin in late December.
RedFork said the successful completion of the work-over program had the potential to very quickly transform the company into a self-funded oil and gas explorer.
About A$500,000 per annum in revenue is already being generated from several of the 15 wells being worked over. This is enough to fund a year’s corporate and administration costs, it said.
RedFork also has cash reserves of about A$5 million.
In June, the company acquired a 77.5% working interest – 60% net revenue interest – in 4160 acres of leases in Oklahoma.
RedFork said the project area was within a major producing field with potential to deliver commercial oil and gas production from both conventional formations and unconventional CBM targets.
“The company is focused on delivering its strategy to establish significant CBM gas-in-place reserves on its leases, which are located adjacent to two of the regions most successful CBM producers - Amvest Osage Inc and TSX-V producer Admiral Bay Resources,” executive director David Prentice said.
Significant progress has been made on the workover program's re-completion and infrastructure works, RedFork said.
It said the tank battery and gathering system works were completed and the roads upgraded. Work on the flow lines is expected to be completed by the end of this month.
The Country Club-1 and 3 wells have been re-completed, with the Burgen, Arbuckle and Bartesville conventional zones open for production. The Country Club-7 and 9 wells are pumping on time clocks from the Oswego Lime and Lower Redfork gas formations, and the Broken Drum-11, Bass-13 and Church-17 wells are re-completed, with the Arbuckle, Wilcox and Mississippi Lime zones open for production.
“From just these limited re-completions of only several wells, modest initial oil and gas production has already been established with 15 barrels of oil per day and 40,000 cubic feet of gas per day currently being produced,” Prentice said.
Looking ahead, RedFork plans to drill between 12 and 16 CBM wells, at a cost of US$300,000 each, in the next 12 months. This involves drilling four wells in each of four sub-programs on a separated 160-acre tract.
“The company has access to two gas sales lines operated by different owners, providing a ready-market for gas produced and quickly transforming exploration success into cash flow,” Prentice said.
