Kopcheff said VicPet was undervalued when analysed in terms of its strong cash flow from oil production and its current drilling program.
“Our Cooper Basin gross oil production is 250 barrels per day with a planned gross increase to 1000 barrels per day by the end of this year,” he said.
“We’re also sharing in gross oil production of 3200 barrels per day in the North Perth Basin as well as 2 million cubic feet per day from the Margarita gas exploration and production project and the Flour Bluff gas field in Texas.
“Our current drilling schedule includes 14 domestic wells and six in Texas and Colorado.”
Kopcheff said VicPet has the largest exploration position in South Australia’s Cooper Basin and Queensland and is currently drilling at the Growler-2 oil field in the Cooper Basin where it hopes to build on earlier exploration success and to prove up a potentially very productive new oil fairway.
VicPet is operator for the PEL 104 Growler-2 joint venture, which is drilling an appraisal well on the Growler oil field to test the 16m oil column discovered in the Jurassic Birkhead Formation in Growler-1.
Growler-2 – now rain interrupted – will be drilled to a depth of 1785m and Kopcheff said results of Growler-2, together with Growler-1 and the adjacent Wirraway-1 oil discovery, would determine the forward development strategy for the Growler-Wirraway oil fields.
“Following the production results for Growler-1, it appears that good oil producing rates can be achieved from the Birkhead sands in this area,” he said
“If this is confirmed by results from Growler-2, it could lead to a large development drilling program of the same style as the successful Santos-operated Cooper Oil Project.”
VicPet’s success at Growler and Wirraway maintains the company’s 100% exploration success rate in PEL 104 and confirms its belief that it may have found a new Jurassic oil province that could have a significant impact on the company’s growth, according to Kopcheff.
“If oil is present, it has the potential for an in-place reserve of up to 100-plus million barrels within PEL 104 and our adjoining PEL 111 permit,” he said.
Participants in Growler-2 and PEL 104 and their respective interests through their wholly owned subsidiaries are VicPet (40%), Impress Energy (40%) and Roma Petroleum (20%).
Meanwhile in the US, VicPet is currently drilling West Florence-1 in Colorado, with drilling also imminent in its Margarita project in Texas.
Yesterday, VicPet was told by operator Mountain Petroleum that West Florence-1 was at a depth of 1519m.
This well will test the major target, the Muddy J sandstone of the Dakota group, at about 1800m.
The project area is west of the Florence oil field, which produced roughly 15MMbbl of oil from fractured shales in the 1940s and the geology of the West Florence oil and gas project is similar to the giant Wattenburg field 160km to the north, according to Kopcheff.
“We’re the first to drill a modern well in this highly prospective area in which Australia’s Strike Oil and Comet Ridge are also showing significant interest,” he said.
“This isn’t surprising, as they have a similar large adjacent project.”
If oil and gas are present, estimates for West Florence are approximately 100-200 billion cubic feet of recoverable gas in the Muddy J sandstone and 15MMbbl of recoverable oil.
Drilling participants are Mountain Petroleum (operator with a 40% stake), Victoria Petroleum (25%), Fall River Resources (15%), Adelaide Energy (15%) and North American Oil Gas Energy (5%).
In Texas, drilling at Project Margarita’s Agavero-1 well is imminent.
This well is scheduled to reach 1341m and is a follow-up to the successful Project Margarita initial wells program.
Gas potential is estimated at up to 700MMcf, with a further two wells, Dona Carlota and Climaco to follow.
Victoria Petroleum has been actively exploring in Australia and the USA for the past 23 years and has a current capitalisation of $42 million.
It has 192 million shares on issue and cash and investments of $5 million (at March 31).
