Reabold Resources set to expand operations in California

Reabold Resources PLC (LON:RBD) have said that they are looking to increase production across their operations in California.

Reabold noted that it had seen success at the which lies within West Brentwood licence in California. This means that it has unlocked a new field with more running room than initially anticipated.

The firm said: “VG-6 was designed to test a new geological horizon at West Brentwood, the Third Massive, different from the Second Massive which is the producing horizon for the VG-3 and VG-4 wells. Success at VG-6 has therefore opened up a new play on the West Brentwood field and therefore additional follow on targets.”

Reabold said that the VG-6 well was tested at 350 million standard cubic feet of gas per day, and following the results a decision has been made to put it on permanent production.

The oil and gas exploration firm added that gross oil production across California, was 50,286 barrels of oil equivalent between July and December 2019. At these sites, the firm holds a 50% interest.

Additionally, net revenue from hydrocarbon sales in California was $1.3 million between July and December 2019.

Stephen Williams, co-CEO, commented:

“We are delighted to have drilled our fifth successful well in California and to see strong rates of production from a previously untested horizon. Success at VG-6 has unlocked a new play with more running room at West Brentwood than we had previously anticipated.

“The excellent economics of our operations in California are evident from the high gross profit margin we are delivering for minor expense. With the addition of VG-6, production is set to continue to increase through 2020, following a strong 2019 where we added incremental wells and grew our income profile.”

Reabold work with Union Jack Oil

In December, the firm said that the West Newton field is being operated in a joint partnership by both Reabold Resources and Union Jack Oil (LON: UJO) was close to commencing in operation.

Reabold Resources PLC has a 39% stake in West Newton, via its 59% holding in operator and 67% shareholder Rathlin Energy UK Ltd. Union Jack Oil holds a direct 17% stake in West Newton.

This review has now been completed and work is imminently pending subject to regulatory approval.

The design was reviewed following the discovery the Kirkham Abbey formation also contained liquid hydrocarbons, having previously been anticipated to be a “major” gas discovery.

Shares in Reabold Resources trade at 0.60p (-3.23%). 26/2/20 14:56BST.

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