Synergy Resources Corp. (NYSE MKT: SYRG) said Jan. 20 that it entered into a day rate drilling contract with Ensign Drilling Co. of North America (Ensign). Ensign will spud the first of 11 wells at Synergy's Cannon prospect, which includes six Codell wells and five Niobrara wells. All the wells will average 22 frack stages with standard-length laterals.
Synergy will use sliding sleeves and slickwater fracks to complete the six Codell wells. The estimated drilling and completions cost is $3.3 million per well. The five Niobrara wells will be completed with sliding sleeves and hybrid gel fracks. The estimated drilling and completions cost is $3.5 million per well. Any possible use of plug and perf during drilling will raise the costs by $300,000 per well, Synergy added.
Additionally, the company said that drilling at the Weis pad was completed Jan. 17. So far, 29 wells have been drilled but not completed. Lower drilling costs and revised completions design will enable the Cannon prospect to be drilled, Synergy added.
Synergy has a full working interest in Cannon, located in the western part of the acreage position. Drilling is scheduled to finish in May or June.
The second fiscal quarter’s production is “below expectations” because of delayed completions by other operators. These new wells were estimated to contribute between 200 net barrels of oil equivalent per day (boe/d) and 300 net boe/d. Their initial production is now scheduled for March. Synergy expects average daily production during the quarter to range between 7,000 boe/d and 7,300 boe/d.
Platteville, Colo.-based Synergy Resources Corp. produces and develops domestic natural gas and oil.
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