This well was prepared for a sidetrack operation last November after a window was milled through the existing five-inch casing for the coil tubing drilling unit to drill the Baxter Shale in an under-balanced condition.

This operation will target an estimated 9.8 million barrels of recoverable oil with associated gas sales of 49 billion cubic feet if the resource can be successfully produced, according to the company. This would have a net present value of $US208 million ($A281.5 million) to Samson.

“The application of coil tubing drilling in an under-balanced condition is considered to be mandatory, such that the fracture intervals can remain undamaged from invading drilling fluids,” Samson managing director Terry Barr said in an earlier report.

The 1067m-thick Baxter Shale interval, with eight mapped fracture zones, previously flowed a light, volatile oil in the adjacent Poitevent well, the company said.

More recently, Samson said US-based Questar has reported the Canyon Creek Unit-41, about 80km south-east of the GC 27-3 well, perforated nine zones – seven of which were in the Baxter Shale, and one in each of the Frontier and Dakota formations.

Questar reported the initial flow rate post-frac from the nine zones in CCU-41 at 5.2 million cubic feet of gas per day. The initial four months of production averaged 1.6 million cubic feet per day. but no data is available about the individual zone contributions to this flow rate.

Samson said the geologic section in CCU-41 appears similar to the section seen in GC 27-3.

In addition, Samson says it will have a residual equity of 73% in the Greens Canyon project after it contributed 55% of the under-balanced drilling cost because one of the farm-in parties did not complete an agreement due to the failure of their third party funding partner.