6th Oct 2008 12:00
LENI GAS & OIL Plc
("LGO" or "The Company")
06 October, 2008
Operations Update - Gulf of Mexico
Leni Gas & Oil Plc, the oil & gas exploration, development and production company, notes today's announcement by Leed Petroleum ("LDP") that testing on the A-7 well in the Eugene Island field, Gulf of Mexico, has achieved rates that equate to 4,012 barrels of oil equivalent per day, based on a conversion factor of 1 barrel of oil to 6 thousand cubic feet of gas and that the sale of production from this well is expected to commence imminently.
The Eugene Island A-7 well is operated by Leed Petroleum. LGO has an indirect interest in the A-7 well, through its 28.94% holding in Byron Energy Pty Ltd ("Byron"). In August 2008 LGO increased its stake in Byron to 28.94%, which in turn 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.
Commenting on the news, David Lenigas, Executive Chairman of Leni Gas & Oil, said;
"Today's results on the A-7 well are very positive for Leni Gas & Oil and further demonstrate the quality of the Eugene Island acreage. This news is also a clear endorsement of our strategy of recently increasing our stake in Byron."
Leed Petroleum PLC today announced the following:
Eugene Island Update
Leed Petroleum PLC, the oil and gas exploration and production company focused on the Gulf of Mexico, is pleased to announce that testing on the A-7 well in the Eugene Island field has achieved rates that equate to 4,012 barrels of oil equivalent per day, based on a conversion factor of 1 barrel of oil to 6 thousand cubic feet of gas. The sale of production from this well is expected to commence imminently.
On 26 August 2008, Leed announced that in order to achieve its targeted commercial production from the A-7 well, the Company would move up the wellbore and begin producing from another of the zones intersected by the well, with the initial completion still accessible for future testing.
The Company has now successfully completed in the shallower sand, which has 55 feet of true vertical thickness net pay. Whilst on clean-up flow, the well tested over a six hour period through a 22/64" choke at a restricted rate of 10.6 million cubic feet of gas per day, 2,245 barrels of oil per day and 128 barrels of water per day with a flowing tubing pressure of 6,159 pounds per square inch absolute. The restricted rate was due to capacity constraints of temporary testing equipment required for use while the well was on clean-up flow.
Leed has also commenced preliminary work on the Eugene Island A-8 well and is currently preparing to spud this well.
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 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 Petroleum PLC, commented:
"We are very pleased that the A-7 well has demonstrated the ability to perform to our expectations and believe that it was worth the wait. The Eugene Island 183/184 field has been instrumental in transforming Leed's financial position and the A-7 result is a great start to what we expect to be a tremendous financial year."
Enquiries:
Leni Gas & Oil PLC
David Lenigas, Executive Chairman
Tel +44 (0) 20 7016 5100
Beaumont Cornish Limited
Roland Cornish
Rosalind Hill Abrahams
Tel +44 (0) 20 7628 3396
Pelham PR
Mark Antelme
Tel + 44 (0)20 3178 6242
Henry Lerwill
Tel +44 (0)20 3170 620
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, 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.
Leed Petroleum PLC is an AIM quoted independent oil and gas exploration and production company. The Company's operations are concentrated in the US Gulf of Mexico and Onshore where Leed has established a significant portfolio of producing and development assets. The Company has interests in 17 offshore fields and one onshore field. Leed's strategy is to grow the Company's portfolio through organic development of its existing assets and to utilise its regional experience to identify and purchase value adding assets.
Byron is a private Australian company, incorporated in 2005. Since its incorporation, Byron has operated as an oil & gas exploration, development and production company focused on opportunities in the Gulf of Mexico and the USA
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