Tellus Resources (ASX:TLU) has commenced drilling operations on the TWP USG #1 well in the U.S.
The well is the first in a two well farming program in the Covenant Mondo conventional oil play located in Sevier County, Utah, USA.
Tellus has funded 30% of the expected costs to earn a 25% participating working interest in the joint venture.
Operations will be updated weekly, and is expected to be completed in about 3 weeks.
Covenant Mondo consists of two leases with a total area of approximately 3,900 acres held over private lands.
The leases are located on the well known “hingeline” overthrust structure in the Rocky Mountains which trends in a North Easterly direction from Arizona in the South right up into Canada.
The overthrust belt has hosted a number of major oil discoveries including the massive Anschutz Ranch East field discovered by Amoco in 1979 as well as the 2004 discovery of the Covenant field located 4 kilometres away.
The Covenant field, one of the largest US onshore discoveries in recent years, is reported to have some 150 million barrels of recoverable oil and is currently producing about 6,400 barrels of oil per day.
The company is lightly valued at around $9 million.
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