6th Jan 2009 10:19
LENI GAS & OIL Plc
("LGO" or "The Company")
6 January, 2009
Successful Completion & Production of Eugene Island A-8, Gulf of Mexico
Leni Gas & Oil plc (LGO) the AIM listed international oil and gas exploration, development and production company notes today's update by the joint venture operator, Leed Petroleum ("LDP"), announcing that the Eugene Island A-8 well has been successfully completed and tested through a 22/64th" choke at a stable restricted gross rate of 6.5 mmscfd and 1,469 bopd (equivalent 2,557 boepd) with 8 bwpd with a flowing tubing pressure of 7494 psia. Production from the well is being sold.
It was also announced that the A-8 well will recover the remaining reserves previously associated with the A-6 well producing zone from a superior take point. Production from the current zone in the A-6 well will cease after a new re-completion of the A-6 well as a long term producer from that well's primary zone. After A-6 re-completion production through the Eugene Island 184A production facilities will total volumes from A-6, A-7 and A-8.
The Eugene Island acreage is operated by Leed Petroleum in which LGO has an indirect interest through its 28.94% holding in Byron Energy Pty Ltd ("Byron"), approximate to an effective net working interest of 8% in the Eugene Island acreage.
David Lenigas, Executive Chairman, commented:
"Today's announcement regarding the Eugene Island A-8 well is another significant step for Leni Gas & Oil. It materially increases our production profile and further endorses the huge potential of our Gulf of Mexico acreage."
"This is a very positive start to 2009 for Leni Gas & Oil. With no debt and increasing profitable production across our portfolio in the US Gulf of Mexico, Hungary, Spain and Trinidad, the Company now has effective net production of over 700 boepd per day only 12 months since acquisition of our first asset."
Competent Person's Statement:
The technical information contained in this announcement has been reviewed and approved by Fraser S Pritchard, Executive Director (Operations) for Leni Gas & Oil Plc (member of the SPE) who has 20 years relevant experience in the oil industry.
Enquiries:
Leni Gas & Oil plc
David Lenigas, Executive Chairman
Tel +44 (0) 20 7016 5103
Beaumont Cornish Limited
Roland Cornish / Rosalind Hill Abrahams
Tel +44 (0) 20 7628 3396
Mirabaud Securities Limited
Rory Scott
Tel +44 (0) 20 7878 3360
Pelham PR
Mark Antelme / Henry Lerwill
Tel + 44 (0)20 3178 6242
Leed Petroleum PLC today announced the following:
Leed Petroleum plc
("Leed" or the "Company")
Eugene Island A-8 Completion and Well Test and Deferment of Drilling
Leed Petroleum PLC (AIM: LDP), the oil and gas exploration and production company focused on the Gulf of Mexico, today announces the successful well completion and flow testing of the deepest pay zone in the Eugene Island A-8 well. This zone, which as previously announced, has 96 feet of true vertical thickness net pay, was tested over a 91 hour period through a 22/64th" choke at a stable restricted gross rate of 6.5 mmcfd and 1,469 bopd (2,557 boepd) with 8 bwpd with a flowing tubing pressure of 7494 psia. The well continues to flow, and the Company is selling production.
The Company intends to defer its 2009 capital expenditure programme until drilling rig and service rates are reflective of oil and gas pricing and the economic environment is more favourable to new drilling. Leed has no planned license commitments during the first half of 2009 other than one well on South Marsh Island block 6. Accordingly, the Company has released the Ensco 98 rig and now has no contracted drilling rig or associated cost.
The A-8 well will recover the remaining reserves previously associated with the A-6 well from a superior take point to that of the existing A-6 well completion. Therefore, in accordance with Leed's field development plans, the Company will cease producing from the current zone in the A-6 well and will execute a relatively inexpensive re-completion of the A-6 well as a long term producer from that well's primary zone.
The Eugene Island Blocks are located 50 miles offshore, south of Morgan City, Louisiana in the Gulf of Mexico in approximately 80 feet of water. Leed's management has built an inventory of development projects and exploration targets across the Eugene Island Block 183/184 Field.
Howard Wilson, President and Chief Executive of Leed, commented:
"I am very pleased that we have finished our first round of drilling at Eugene Island with three successful wells, all of which are now on commercial production. We will use the substantial revenue stream created by these wells to strengthen our balance sheet while we await rig and service rates to normalise and commodity prices and general economic conditions to improve. When timing is appropriate, we will re-commence our drilling programme to exploit our substantial untapped inventory of projects and develop additional fields in order to diversify our production base. In the meantime, we will not be resting on our success at Eugene Island but rather building on it as we continue our search for high quality assets to fold into the portfolio and work up additional projects on our existing properties."
NOTES TO EDITORS
Leni Gas & Oil Plc is an international oil and gas exploration, development and production company headquartered in London, trading on the London Stock Exchange's AIM index. The Company has assets in the US Gulf of Mexico and Lower 48, Spain, Trinidad, Hungary and Malta. LGO's strategy is delivering growth through the acquisition of proven reserves and the enhancement of producing assets in low risk countries.
The Eugene Island acreage is operated by Leed Petroleum, in which LGO has an indirect interest through its 28.94% holding in Byron Energy Pty Ltd ("Byron"). Byron has a 25% Working Interest in both Eugene Island Blocks 183 and the southern half of Block 184 (Net Revenue Interest up to 20.83% in Block 183 and 19.17% in the southern half of Block 184), including the Eugene Island 184A platform and production facilities. Byron has also a 12.5% Working Interest (Net Revenue Interest 9.58%) in the northern half Eugene Island Block 184 and 10.37% Working Interest (Net Revenue Interest 8.64%) in Eugene Island Block 172, excluding the Eugene Island 172 producing reserves and platform.
GLOSSARY
boepd : barrels of oil equivalent per day calculated on the basis of one thousand cubic feet of gas equals one barrel of oil
bopd : barrels of oil per day
bwpd : barrels of water per day
mmscfd : million standard cubic feet of gas per day
psia : pounds per square inch absolute
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