15th May 2009 07:00
LENI GAS & OIL PLC
("LGO" or "The Company")
15 May 2009
MONTHLY PRODUCTION UPDATE - APRIL
HUNGARY PRODUCTION RESTARTS 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 production update for April 2009.
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 3,885 bbls of oil and 974 mmscf of gas during the month. Net LGO production in barrels of oil equivalent totalled 4,047. Monthly production was similar to the previous month with over 60% 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. The program shall also prepare all wells for a major perforation program in early 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 resumed production on 29 April 2009 with completion of the Pen-104a sidetrack which targeted a higher part of the structure to maximise recoverable reserves. Stabilised production of 3 mmscfd gross was reported on 05 May 2009. Production net to LGO totalled 0.309 mmscf of gas and no condensate during the month. The Gasfield produces no oil. Net LGO production in barrels of oil equivalent totalled 52. 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 1,130 bbls during the month with almost 10% of production offline due to planned well interventions. The Oilfield produces no gas. Net LGO production in barrels of oil equivalent totalled 565.
Leed Petroleum third party discussions
LGO also notes yesterday's announcement from Leed Petroleum ("LDP") subsequent to the Company's announcement on 11 May 2009. LDP announced they have had discussions with the third party who notified interest on 8 May relating to the purchase of LDP shares and have decided not to continue any further dialogue regarding the possible purchase of LDP shares. LGO retains an indirect interest and exercise option in LDP properties through a 28.94% shareholding in Byron Energy Pty Ltd.
David Lenigas, Executive Chairman, commented:
"As forecast April reported a similar Company production schedule as March due to planned major development works in Spain and Hungary with 30% of the total production planned offline due to scheduled development programs in half of LGO's operations."
"In Spain, the last stage of the first phase stimulation program is underway which is rehabilitating all wells to deliver major well productivity improvements in existing production zones and through re-opening blocked perforation zones. This program is due to complete by mid June and 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."
"In Hungary, the PetroHungaria joint venture successfully reinstated production from the Penészlek Development Area at the end of the month with stabilised production of 3 mmscfd and we expect to report a full production schedule for May. In Trinidad the majority of the planned well interventions were completed to resume near stabilised production."
"The Company expects the May production schedule to be significantly higher than April as full production from Hungary resumes and Spain returns some of the rehabilitated wells to production. 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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