Daybreak advances Kentucky, California operations

Oct. 13, 2014
Daybreak Oil & Gas Inc., Spokane, Wash., has advanced its operations in Kentucky and California.

Daybreak Oil & Gas Inc., Spokane, Wash., has advanced its operations in Kentucky and California.

In Kentucky, the Jackson H-20 oil well was recently drilled to a measured depth of 3,978 ft. Logs and other measurement data indicate that the horizontal section of the wellbore encountered 2,585 ft of oil-bearing sandstone.

The Dwight Dillon H-22 oil well also has recently been drilled to a measured depth of 4,646 ft. Logs and other measurement data indicate that the horizontal section of the wellbore encountered 3,054 ft of oil-bearing sandstone.

The drilling rig has been released. However, two more wells are planned to be drilled before yearend. The H-22 and the H-20 wells are scheduled to be hydraulically fractured on or around Oct. 14 and 21, respectively.

The Raymond Lyons H-23 and H-24 oil wells have been successfully hydraulically fractured (OGJ Online, Sept. 18, 2014). A completion rig is now at that location completing the wells which are expected to be put on production by the end of October.

Construction has started on the central production facility that will service the H-20, H-22, H-23, and H-24 oil wells along with future wells in the area. The Dwight Dillon H-22 and the Jackson H-20 wells are expected to be put on production by the middle of November.

Daybreak’s net production in Kentucky for the quarter ended Aug. 31 totaled 7,202 boe, up from 4,179 boe for the quarter ended May 31. There are currently nine wells on production and four wells awaiting completion and production facilities.

The company owns an average 25% interest in nine producing horizontal oil wells and have 7,300 acres under lease in the Appalachian basin in Lawrence County.

In California, Daybreak’s net production for the quarter ended Aug. 31 totaled 4,066 boe from the company's existing 20 oil wells, down from 4,463 boe for the quarter ended May 31.

The company is planning to drill additional development wells in at least four of its producing pools on the Black, Bear, Dyer Creek, and Ball properties and two wells to explore for new reserves in the southern portion of its acreage position. The company has applied for four new drilling permits, which it anticipates will be issued within the next 45 days.

The company plans to drill three wells this fall and an additional three wells this winter. At least one of these wells will be an exploratory well in a new prospective area. Daybreak operates production from 20 wells in the East Slopes project area in Kern County.

"We have steadily and successfully been executing our strategy of developing low-cost shallow oil reserves and as a result, the company has posted its first quarterly net profit,” commented James F. Westmoreland, chairman, president and chief executive officer.

“Our property in Kentucky has been fueling our growth while our property in California has been providing a steady base of production, which in part has fueled our growth as well," he added.