30th Mar 2009 07:00
LENI GAS & OIL Plc
("LGO" or "The Company")
Eastern Hungary - Penészlek Development Expansion
Leni Gas & Oil plc (LGO) the AIM listed international oil and gas exploration, development and production company today announces PetroHungaria Kft in which LGO has a 7.27% interest commenced drilling of the Pen-104a sidetrack to increase production from the Penészlek Development in eastern Hungary.
As announced in the 19 March 2009 report on the contingent and prospective resources within the Penészlek Development area, the Pen-104a sidetrack shall access reserves in the higher part of the structure to maximise recovery of the mean contingent resources of 1.1 bcf. Based on the historical production of the Pen-104 well since first gas in August 2008, the Pen-104a sidetrack shall target recovery of about 0.6 bcf remaining. Completion and testing of the Pen-104a sidetrack is expected to take three weeks and shall be immediately placed on gas sales production using the existing processing and transportation infrastructure.
The identified resources in the Penészlek Development area are being targeted via five possible drilling locations with unrisked mean GIIP from the five locations totalling 11.27 bcf, excluding the resources of the prematurely abandoned Penészlek Miocene field which will be reported in the near term. The total unrisked mean gas resources includes two locations (Pen-104a and Pen-12 appraisal) totalling contingent 2.57 bcf and three locations (Pen-9, Pen-12 twin and Pen-102 sidetrack) totalling prospective 4.65 bcf.
Further to the 21 January 2009 announcement on the development scheduling of the five drilling locations, the joint venture now plan on drilling the Pen-12 appraisal (Pen-105) well next in the schedule. Pen-105 shall be drilled near to Pen-12 which successfully tested gas when originally drilled in 1983 and is anticipated to be significantly higher structurally than Pen-12. Pen-105 will spud approximately late Q2 of this year after the necessary permits and approvals have been acquired. The permitting of the pipeline to tie-in Pen-105 to PetroHungaria's Penészlek production infrastructure is underway with the intent of minimizing the time from rig release to the commencement of production.
The joint venture is current assessing appraisal drilling of the Pen-9 resources and shall announce in due course the development plan for all remaining Penészlek Development resources.
David Lenigas, Executive Chairman, commented:
"Commencement of the next stage of Penészlek development is another significant milestone in the further exploitation of the Company's interests in Eastern Hungary."
"The recently announced reserves upgrade for the area from the new seismic interpretation has identified the high potential of the acreage for further exploitation. The development schedule for 2009 shall aim to fast-track all identified resources to accelerate gas sales production and sustain profitable cashflow from our East Hungary asset for some years."
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
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.
All reserves and resources definitions used are per the Society of Petroleum Engineers 2005 classification.
GLOSSARY
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boepd :
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barrels of oil equivalent per day calculated on the basis of six thousand cubic feet of gas equals one barrel of oil
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contingent :
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contingent resources are those quantities of petroleum which are estimated, on a given date, to be potentially recoverable from known accumulations but which are not currently considered to be commercially recoverable
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GIIP :
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gas initially in place
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mmscfd :
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million standard cubic feet of gas per day
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prospective :
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prospective resources are those quantities of petroleum which are estimated, on a given date, to be potentially recoverable from undiscovered accumulations.
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