Empyrean provided the following update on operations at the Sugarloaf Project within the Sugarkane Gas & Condensate Field, Texas.
The May-1H well has been fracture stimulated and is currently flowing to sales. This well is the first well to be drilled, stimulated and produced on a post farmout basis within the Sugarloaf Project. Revenue will therefore accrue directly to Empyrean for its 3.0% working interest ("WI") share after royalties have been paid. The well was stimulated with 16 stages across approximately 4,800 ft of horizontal
The following are recently recorded daily and average production rates:
The following comments should be considered when assessing these initial production rates.
Luna-1H (3% WI)
The fracture stimulation of the Luna-1H well is complete and this well commenced cleaning up to sales on the 18th November 2010. The well was stimulated with 14 stages across just over 5,000 ft of horizontal section. Empyrean will provide further guidance on this well once stabilized flow has been achieved. In a similar fashion to the May-1H well, the choke setting on this well is being gradually
Direct Assets-1H (3% WI)
The fracture stimulation of this well has commenced using a similar design to that utilized in other recent wells. Empyrean will provide the market with a further update once the well has unloaded and cleaned up.
Kowalik-1R (10.2% WI)
The remedial operations on this well have been successfully carried out and the isolation plugs have been removed from the well. Production tubing will now be installed before the well is flowed back to sales.
Gilley-1H (3% WI)
Operations are now underway at the Gilley-1H well. Empyrean will provide further updates on this well once drilling has been completed.
Commenting, Empyrean director - Tom Kelly said, "The production sales at the May-1H well represent a significant new milestone for the company as these sales are accumulating our first post farmout revenue from the Sugarloaf Project. In a relatively short period of time a number of additional wells will come on to production to add to this revenue."
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