XState, Sacgasco shares climbing again after strong gas flow test results
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Sacgasco and Xstate both benefited, becoming multibaggers in just a few months but shares made a substantial retreat last month after some drilling setbacks.
Today however they climbed after revealing the Borba well was flowing 1.6 million cubic feet of gas per day (mmcfpd).
The gas was of a high quality with no observed water and the well was perforated at 4 shots per foot over a 13-feet interval from 3,885 to 3,898 feet.
The pair intend to bring the well into production at a flowing rate of around 3 mmcfpd and Sacgasco managing director Garry Jeffery said they were looking to fast-track connection of the well to California’s pipeline to make cash “as quickly as possible”.
Similar to Australia, California has high demand for natural gas but is heavily reliant on imports and consumes 7 billion cubic feet per day.
Furthermore, natural gas prices in the Northern Sacramento Basin are around US$4 per thousand cubic feet while the US benchmark (Henry Hub) is US$2.95.
“The results from testing are very pleasing and consistent with results from wells in the adjacent multi-well Ord Bend Gas Field,” Jeffery said.
“Confirming Borba 1-7 as a natural gas producing well is an excellent outcome for Sacgasco and its joint venturers and reaffirms our confidence that our under-explored Sacramento Basin leases have huge upside.”
Sacgasco shares rose by as much as 16 per cent in early trade while XState shares rose by more than 40 per cent.