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Oil Price Decline Prompts BNK to Flowback Caney Shale Well

Tumbling oil prices have prompted BNK Petroleum Inc. to start flowback on its Emery 17-1H well (98.7% interest) in Oklahoma's Tishomingo Field and fracture stimulate the rest of the lateral at a later date, the Camarillo, CA-based company said in an operations update Tuesday.

In an update released in October, BNK had said a drilling rig deployed in the Caney Shale, a shallow oil formation in the Ardmore Basin, was drilling the lateral for Emery 17-1H, and the well was expected to be completed and flowing back in November (see Shale DailyOct. 22). The company has fracture stimulated 30% of the well, which began flowback Tuesday.

"The Emery 17-1H issues impacted drilling time and cost and necessitates remedial work prior to fracture stimulation of the rest of the lateral," BNK said. "The company expects to utilize these new drilling practices in future Caney wells and believes they will enable significant future savings."

Also in the Tishomingo Field, the Camarillo, CA-based company recently finished drilling the Nickel Hill 36-3H well (99.4% interest) and cemented the casing in place. Revised drilling practices were used that helped avoid some issues encountered in the Emery 17-1H well.

BNK's Caney production is declining at a slower rate than previously forecast, "and in management's opinion is performing very well," the company said. "However, given the oil price drop over the last few months, the company is taking a conservative approach to capital expenditures." BNK has released the drilling rig, will postpone completion of the Nickel Hill 36-3H well and fracture stimulation of the rest of the Emery 17-1H well, and is evaluating cost saving measures.

BNK also reported on its Gapowo B-1H well in Poland, where a previously announced reservoir model analysis, which simulated flow rates and recoveries that would be achieved if another well is drilled nearby, was recently completed.

"The forecasted flow rates and estimated recoveries predicted by the numerical model for a full stimulated length lateral, in addition to the overpressure that was confirmed by the data collected from the Gapowo B-1H well, are encouraging and the company believes further wells are warranted," BNK said.

The encouraging modeling results, strong natural gas prices in Europe and BNK's large Polish acreage position "will be attractive to joint venture partners with the capacity to advance this project," BNK said. The company has an interest in three total concessions in Poland totaling 804,209 gross (706,678 net) acres through a stake in Saponis Investments Sp. z o.o., and its subsidiary, Indiana Investments Sp. z o.o. 

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