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TICKERS: JCO; JROOF

Tiny Oil Driller Strikes Crude in the STACK
Contributed Opinion

Source:

Keith Kohl, managing editor of Energy and Capital, profiles a small gas and oil explorer that has reported a successful test well in the Osage formation.

Jericho Oil Corp. (JCO:TSX.V; JROOF:OTC) has been making moves in the STACK recently, and it's worth your due diligence to find out what's going on.

First, let's catch everyone up on this little-known oil play that's on a hot streak.

Short for Sooner Trend Anadarko Canadian and Kingfisher, the STACK play is a shale play located in the Anadarko Super Basin in Oklahoma that boasts several shale layers (hence the reason for its acronym). It's what we like to call a stacked-

Jericho has built a strong position in the play consisting of approximately 16,000 net acres in both Garfield and Blaine Counties. More important, however, is that the company was able to keep its entry costs low.

Back in early June, Jericho announced it had participated in the drilling and completion of two primary stacked formations in the play: the Meramec Shale and Lower Osage.

Recently, the company reported the well results for its Swordspear 23-10-15 1H well. The well is a part of Jericho's JV farm-in acreage, and was targeting the Lower Osage formation. At last count, the Swordspear well was producing an average rate of 400 BOE per day after being on an electrical submersible pump for the past month.

What you may not realize, however, is that this output is set to increase. It takes about two or three months to hit its peak initial production, and Jericho has already stated that recent production flows are in excess of 500 BOE per day.

Let's be clear here…

This is great news for investors looking to take advantage of higher oil prices.

Not only is Jericho's breakeven around $40 per barrel, but these strong results mean the company will move forward with new wells.

Thanks to the success of the Swordspear well, the company's JV will participate in a second Osage formation well. Dubbed the Trebuchet 21-23N-10W #1H, this well will be drilled into the northern STACK footprint, and help delineate Jericho's acreage.

In other words, the Trebuchet well is on deck and will be spud in August.

Look for this tiny driller to capitalize on more successful drilling results as crude prices try to find support above $70 per barrel.

Keith Kohl is the managing editor of Energy & Capital, an independent research service that focuses primarily on opportunities in the world's energy markets. Kohl shares his vast knowledge of the global energy complex and the unprecedented opportunities offered in those markets with members of Energy Investor and Pure Energy Trader.

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Disclosure:
1) Keith Kohl: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: None. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company currently has a financial relationship with the following companies mentioned in this article: None. I determined which companies would be included in this article based on my research and understanding of the sector.
2) The following companies mentioned are billboard sponsors of Streetwise Reports: Jericho Oil. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Jericho Oil. Please click here for more information.
3) Statements and opinions expressed are the opinions of the author and not of Streetwise Reports or its officers. The author is wholly responsible for the validity of the statements. The author was not paid by Streetwise Reports for this article. Streetwise Reports was not paid by the author to publish or syndicate this article. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Jericho Oil, a company mentioned in this article.




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