Black Mountain Energy (ASX:BME) is participating in the drilling of a well in the Permian Basin on its Half Moon prospect, located in New Mexico.

The company says Manzano Energy’s proposal to form a Working Interest Unit (WIU) and drill a first well has been accepted, with drilling set to begin in early June, with first production anticipated in about 90 days.

Black Mountain Energy Executive Chairman Rhett Bennett said: “The well proposal received from Manzano Energy, which includes forming a strategic Working Interest Unit, aligns to our vision for the acreage.

This is the first step in realising the growth potential that originally attracted us to this acquisition. I am pleased that we have been able to commence monetizing this asset so quickly since acquiring our position only 4 months ago.”

The project is estimated to cost US$12.3 million to drill, fracture, stimulate, complete and tie-in.

“This is the first step in realising the growth potential that originally attracted us to this acquisition”

Black Mountain has also seen an increase in its share price to 10.526% at $0.021 as of 3.45pm, 1 June 2023.

The company says technical reviews have been completed and Black Mountain believes that there is an opportunity to develop the 3rd Bone Spring interval with horizontal drilling and fracture stimulation technology.

Black Mountain Energy is an ASX-listed company, focused on sustainable development of oil and gas projects onshore Australia and the U.S.