Reabold Resources PLC (LON:RBD) Co Chief Executive Officer Stephen Williams caught up with DirectorsTalk for an exclusive interview to discuss the successful drilling result and oil discovery at Monroe Swell.
Q1: Another exciting announcement today, can you talk us through the drilling result at Monroe Swell?
A1: So, Monroe Swell well that we just announced as our third drilling event in California, previously we drilled two wells on the West Brentwood project, also very successful, and this is the first well drilled at the Monroe Swell.
We were very happy with the results, we got a really good section of pay, we reported 60 metres of pay as indicated by the logging so it’s a fantastic result and we’re very excited about the potential value we’ll get out of this well.
Q2: Why is this such an important result for Reabold Resources?
A2: Monroe Swell I think is really going to be the core asset within the California part of our business. We’ve been extremely excited with the success we’ve had at West Brentwood already in California, but Monroe Swell could just be a significantly larger asset. it’s quite simply just a bigger oil field than West Brentwood and we think there’s a lot more resource potential to get from there.
So, it was really really important to get that first well in Monroe Swell, to drill it successfully, to have the discovery there to prove the resource potential in this much larger field.
It’s also worth noting that the economics at Monroe Swell we believe will be extremely favourable, drilling at Monroe Swell will be low cost and OPEX is also very low. These are very shallow reservoirs, so the drilling is very quick, it was less than a week to drill the well, and the drilling therefore is very cheap. What that means is that you don’t need particularly high production rates out of each well to drive very powerful economics.
So, whilst we don’t necessarily think that the production rates have to be as high as we’ve seen at West Brentwood where they were very high, what we do believe here is we will be able to drill multiple wells, all of which will be economically valuable and will generate a lot of value for the company.
There’s lot of running room at Monroe Swell, we can keep drilling a significant number of wells and generate a lot of production value.
Q3: So, what are the future plans at Monroe Swell and throughout California?
A3: The first thing will be to test the well which will happen over the next few weeks and then we’ll get that well put onto production as soon as possible thereafter. It’s quite a simple process in these California assets that put these wells onto production and get them generating production cash flow as soon as possible.
We always budgeted to drill another well at Monroe Swell within this year, I think given the success of this one we’ll move to drill the next well as soon as possible. As I said earlier, I think we can drill multiple wells on this asset, hopefully in a relatively short time frame.
Of course, the rest of California, we’re not losing site of our Grizzly Island project. So, we have a third distinct project in California which is a slightly higher risk well but if it comes in will be the most valuable of all these projects. So, that’s a gas project called Grizzly Island and we expect to drill that in a few months’ time as well.
Q4: What else is happening within the business at the moment?
A4: Reabold Resource have got a pretty full activity schedule over the next few months.
So, in addition to all of the activity that’s going on in California, which I think I’ve already touched on most of that, we’re also expecting to drill a very exciting West Newton appraisal well. This is our onshore UK project, up in Humber Valley, and we’re expecting to get that drilled in a relatively short time frame from here and we’ll also be drilling in Romania as well.
So, two more high impact, very attractive, relatively low risk appraisal wells coming in different parts of the world and the ongoing activity in California as well.