9th Jun 2009 07:00
LENI GAS & OIL PLC
("LGO" or "The Company")
09, June 2009
MONTHLY UPDATE - MAY
HUNGARY CAPACITY RESUMES AND SPAIN EXPANSION CONTINUES
Leni Gas & Oil plc (LGO), the AIM listed international oil and gas exploration, development and production company, today gives its monthly update for May 2009.
During May the Company's direct and indirect monthly production totalled 18,045 boe (average 583 boepd) which was 16% increased from April (15,539 boe). Due to scheduled major development programs in Spain and restricted production in Hungary and the Gulf of Mexico 30% of company production is offline (20% planned programs, 10% restricted rate). The production schedule is expected to return to near full capacity in June with completion of the Spain expansion program and unrestricted operation of Hungary.
The monthly update from all countries of operation is summarised as follows:
Spain
The Ayoluengo Oilfield (100% LGO) in northern Spain, through LGO's 100% ownership of Compañia Petrolifera de Sedano, S.L. produced net to LGO 5,540 bbls of oil and 1.1 mmscf of gas during the month. Net LGO production in barrels of oil equivalent totalled 5,723. Monthly production was slightly higher than the previous month with over 45% of the production planned offline due to the execution of the final stage of the first phase field stimulation program which shall continue to mid June. The final stage of the field stimulation program is rehabilitating all wells with the first major cleanout and perforation re-opening program in 20 years. A 100% improvement in production is targeted at completion of this stage with improved productivity from the existing open perforations and the re-opening of currently blocked zones, with the latter showing signs of reservoir re-pressurisation from the water injection campaign. The program shall also prepare all wells for a major perforation program in third quarter to perforate 400 metres of undepleted zones.
US Gulf of Mexico & Lower 48
The interests held by Byron Energy (28.94% LGO) in the US Gulf of Mexico and Gulf Coast is producing at a restricted rate of 5,000 boepd gross from the Eugene Island field as announced by the joint venture operator on 11 May 2009. Monthly production was restricted from the average of 6,000 boepd due to reduced gas sales pipeline system availability. LGO's indirect interest in the Eugene Island field through Byron Energy approximates to an effective net LGO monthly production in barrels of oil equivalent totalling 10,875. As announced on 08 April 2009, LGO has completed a Heads of Agreement with Byron Energy to transfer the Company's shareholding in Byron Energy from an indirect to a direct ownership of its US Gulf of Mexico oil and gas assets.
Hungary
The Penészlek Gasfield (7.27% LGO) in eastern Hungary, through LGO's 7.27% ownership of PetroHungaria Kft produced net to LGO totalled 5.15 mmscf of gas and 0.98 bbls of condensate during the month. The Gasfield produces no oil. Net LGO production in barrels of oil equivalent totalled 859. Due to restricted capacity in the third party gas transportation line for a few days approximately 25% of planned production was offline during the month. The production schedule of ZalaGasCo Kft (14.74%) LGO) in western Hungary will be announced in due course.
Trinidad
The Icacos Oilfield (50% LGO rights) located on the Cedros Peninsula of Trinidad, through LGO's 100% ownership of Eastern Petroleum (Australia) Pty Ltd produced gross 1,175 bbls during the month. The Oilfield produces no gas. Net LGO production in barrels of oil equivalent totalled 588.
David Lenigas, Executive Chairman, commented:
"As forecast May reported a higher Company production schedule than April of 16% increase with near full production from Hungary and a few rehabilitated wells in Spain returned to production. 30% of the total production continues offline with 20% planned with the major Spain development program and the balance with restricted production due to third party gas transportation capacity in Gulf of Mexico and Hungary."
"In Spain, the last stage of the first phase stimulation program continues to deliver major well productivity improvements in existing production zones and through re-opening blocked perforation zones. This program is targeting at least one third of our end 2009 overall production target of 1,500 bopd. The second phase stimulation program due for completion in summer 2009 is targeting most of the remainder of this target. We are excited also by early signs of re-pressurisation of the reservoir from the long term water injection program."
"In Hungary the Penészlek Development Area returned to near full production since completion of the Pen-104a sidetrack at end April although with a few days of production restrictions due to third party gas transportation capacity. In Trinidad stabilised production continues."
"The Company expects the June production schedule to be a step change higher than May as full production from Hungary is planned and Spain returns about half of the rehabilitated wells to increased production levels. In the near term the Company expects to release the full production schedule for the Gulf of Mexico interests on completion of the previously announced indirect to direct ownership conversion."
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
Fraser Pritchard, Executive Director (Operations)
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 7337 1500
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
boe = barrels of oil equivalent calculated on the basis of six thousand cubic feet of gas equals one barrel of oil
boepd = boe per day
bbls = barrels of oil
bopd = barrels of oil per day
mmscf = million standard cubic feet of gas per day
mmscfd = mmscf per day
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