First new oil wells in years being drilled in shale region

4 weeks ago WBRZ 0

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GILLSBURG, Miss. (AP) – An Australian company is drilling new wells for the first time in years in an oil formation that straddles southwest Mississippi and southeast Louisiana.

Australis Oil & Gas Ltd. announced earlier this month that it had started drilling the first of at least six planned wells near Gillsburg, Mississippi.

The company says it picked well sites in the most productive and proven part of the Tuscaloosa Marine Shale. It says it plans to spend $43 million on drilling, an average well price of about $7 million. That’s less than the $10 million-plus common during earlier drilling.

Australis says it’s trying to prove it can drill cheaply but still produce as much as earlier wells.

New drilling has come as oil’s price has risen above $70 a barrel in recent weeks.