Winchester Energy Limited provided an update on its field activities at the Varn Oil Field in Nolan County, Texas. Winchester also recently drilled, cased and completed JVU#6 to a total depth of 4,715ft. JVU#6 is the first designated producer well for the forthcoming Varn Oil Field waterflood operations where water will be injected into the Lower and Upper Fry formations via water injector wells to raise reservoir pressure thereby forcing oil towards pre-drilled producer wells.

JVU#6 returned net pay of over 26ft across the Lower and Upper Fry formations which, despite the Upper and Lower Fry formations having been depleted by historic production, prompted Winchester to perforate the zones for any potential bonus residual primary oil production. After successfully swabbing oil and gas, JVU#6 was placed on pump and immediately produced approximately 80 barrels of oil per day (bopd) with gas. After production stabilized over ensuing days, JVU#6 is producing approximately 30-40 bopd plus gas.

Gas production will be tested shortly to determine the viability of placing JVU#6 on gas sales. To encounter primary production in JVU#6 is an unexpected bonus for the Company as oil will immediately go to sales. Given the results at JVU#6 it is now considered relatively likely that the producer wells in the vicinity of JVU#6 will similarly also produce primary oil and gas.

These producer wells are scheduled to be drilled next. Winchester has a 100% working interest in the Varn Oil Field, located 18 miles to the east of the Company's existing producing assets in Nolan County, Texas. The Varn Oil Field contains existing Proven and Probable Reserves (2P) of 1,068,000 barrels of oil equivalent comprised of 994,000 barrels of oil and 442 thousand cubic feet of gas.

Production is to be derived from the Fry Sands which, together with the Ellenburger Formation, is currently producing oil and gas at Winchester's Nolan County operations. The majority of wells are planned for the central area where the Upper and Lower Fry Sand overlap while the rest of the wells capture oil from the more widespread Upper Fry Sand. Waterflooding is a secondary recovery technique which injects water into an oil reservoir in a downdip position.

The water repressurises the field and provides energy to move unswept oil updip to crestal oil well producers.