In separate Australian Securities Exchange statements, the junior explorer said production testing of its exploration well at its Southwest Edwards prospect, in Hinds County, Mississippi, failed to recover oil or gas from a 30-foot zone of interest.
As a result, Austin said the operator had decided to plug and abandon the well as a dry hole and focus on production testing at the Jeter Branch prospect in Louisiana and a yet-to-be-announced additional prospect.
“I’m disappointed that this drilling effort has resulted in a dry hole, however Austin has other quality prospects identified and funded to mitigate just this type of outcome,” Austin managing director David Schuette said.
The company is now acquiring a production rig for the Jeter Branch Prospect and intends to test previously identified potential pay shortly.
Austin, which owns a 50% working interest and a 37% net revenue interest, said the Jeter Branch prospect is estimated to contain 136,000 barrels of recoverable oil and 2.1 billion cubic feet of gas.
Estimates of the amount of oil or natural gas believed to be recoverable from known Jeter Branch reservoirs under existing economic and operating conditions are 136,000 barrels of oil and 2.1 billion cubic feet of gas.
Elsewhere in the US, Austin said it has acquired a 25% working interest and 18.75% revenue interest in a 640-acre lease, in the most prolific oil and gas producing area of south Texas.
Schuette said the joint venture planned to begin drilling on the Kenedy County lease in the next 30 days.
“This prospect has the potential to bring immediate positive impact to the company,” he said.
“It also represents one of the better risks versus reward ratios that Austin has participated in. This prospect is being drilled by the operator via a turn-key drilling agreement, therefore eliminating any cost over-run exposure while guaranteeing that the operator will hit target depth at a fixed cost.”
Recoverable reserves estimates for the project are 6-9 Bcf of gas, of which Austin would be entitled to up to 1.687Bcf.
The lease is in the R. Ramirez Survey, about 17 miles east of Sarita in Kenedy County, Texas.
