Trillion Energy Hits 55 Metres Of Potential Gas Pay In Fourth Well At SASB

Preliminary data is in for the fourth well drilled by Trillion Energy (CSE: TCF) under their multi-well development program. The data is for the West Akcakoca 1 well, which the firm resumed drilling last month.

The well, which was drilled to 3,839 total measured depth and a true vertical depth of 1,677 metres, is reported to have hit 55 metres of potential natural gas pay. The gas pay is said to have intersected six sands of the Akcakoca member, the production zone for the SASB gas field, based on analysis from logging while drilling.

Trillion expects to run in and cement the production casing this week on the West Akcakoca 1 well, while it is currently in the process of selecting initial perforation intervals to place the well into production. Production is currently slated to begin before months end, with completion and flow testing to follow immediately after perforation is completed.

The data follows the firm last month indicating that the third well under the multi-well development program, Guluc 2, had intersected 73 metres of potential gas pay based on logging while drilling results.

With the announcement of the Guluc 2 well being completed while intersecting 73 metres of natural gas pay, Research Capital Corporation maintained its “Buy” recommendation and its $1.35 price target on the company. Eight Capital meanwhile initiated coverage on Trillion the day before the announcement, assigning a “Buy” rating and a price target of $1.50 per share.

READ: Trillion Energy Hits 73 Metres Of Potential Gas Pay In Guluc 2 Well

In addition to West Akcakoca 1, the company currently expects to place the Guluc 2 well into production before months end. Originally slated to enter production in February, production was delayed after several earthquakes in Turkey disrupted logistics in the area, delaying the delivery of tools needed for perforation to occur. To prevent further delays to the development program, the company elected to move the drill rig to the fourth well location.

Once the West Akcakoca 1 well is completed, the drill rig will be skidded back to Guluc-2 to enable completion of the well.

READ: Trillion Energy Resumes Drilling West Akcakoca-1 Well

“That is 4 for 4 success at SASB, as Trillion successfully executes its gas development program at SASB. We eagerly await the gas flow rates and plan to put the wells into production, end of this month. As South Akcakoca 2, Guluc 2 and West Akcakoca 1 wells targeted resource prospects, not reserves, Trillion has significantly increased the proved reserves through the drilling program to date. We expect to release our updated reserve report by the end of the month,” commented Trillion Energy CEO Arthur Halleran on the development.

The current development program

With the completion of the West Akcakoca 1 and Guluc 2 wells, Trillion’s current development program for the SASB gas field will be roughly 20% complete. Originally slated to consist of 17 wells under a two-phase development program, the company recently added several planned wells to the program.

The additional wells consist of three side-track wells, which take less time for development than long reach directional wells. Given the nature of their development, they also have a lower development cost than directional wells, given that they utilize an existing section of well bore to create a new well. The savings amount to an estimated $3.0 million per well.

“We see the average well generating an NPV10 of US$66 million, with an IRR great than 500% and a pay-out of 3 months. This quick generation of free cash flow results in a self-funded 20-well development program which drives production from an estimated 515 BOE/d in Q4/22 to 6.2 MBOE/d at the end of the development program in Q2/24,” said Eight Capital of the development program during its initiation report.

The decision to add the wells to the development program follows the development of the South Akcakoca-2 well, which was the first side-track well developed by the company, and demonstrated Trillion’s ability to conduct such drilling. Furthermore, the wells are estimated to take anywhere from 10-30 days to develop, versus the current 45-48 days under the current program.

As a result of the expansion and shortened timelines, Trillion currently anticipates to complete 11 drill holes this year.

“During 2023 we are focusing on using the Uranus rig to increase production through new wells, sidetracks and workovers. An added benefit of drilling side-tracks from existing well boreholes is that they are already tied into the pipeline and production facility, so once drilled and completed the wells are immediately put on production,” said Halleran at the time of announcement.

Trillion Energy last traded at $0.37 on the CSE.

FULL DISCLOSURE: Trillion Energy is a client of Canacom Group, the parent company of The Deep Dive. The author has been compensated to cover Trillion Energy on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. We may buy or sell securities in the company at any time. Always do additional research and consult a professional before purchasing a security.

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