Xstate Resources Limited provided its shareholders and the market with an update on the planned oil development wells. The first well, Tabers 16-2-8-17, has been drilled to Total Depth of 1729m including over 500m of near horizontal lateral which was drilled within the oil column. Free oil was observed in the mud pits.

The well will now be connected for production at which time they will have an Initial Oil Production rate. The Bonanza #3 drilling rig is being moved to the second well in the program, the Taber 1-2-8-17 well. The drilling program will be funded from the net cashflow resulting from production in Canada.

The planned development wells are: Tabers 16-2-8-17: Drilled to Produce Proved Undeveloped Reserves, Tabers 1-2-8-17: Targeting Probable Undeveloped Reserves, Killam 16-34-41-13: Targeting Probable Undeveloped Reserves. The wells are considered independent of each other. The cost of the 3 well development program is estimated at A$2.7 million (gross), which will be circa AUD 945,000 net to Xstate.

The operator anticipates a gross increase in production of 200 BOPD, which is 70 BOPD net to Xstate. Given the current benchmark oil price of around US$100/bbl, these wells are projected to pay back the capital expenditure in less than 12 months.