Leni Updates Workover Ops at Spanish Wells

Leni announced further details of the well work-over operations being performed at its 100% owned Ayoluengo and Hontomin Oilfields in Northern Spain.

As planned, Société de Maintenance Pétrolière ("SMP") and Services Pétrolièrs Schlumberger ("Schlumberger") were mobilized to the field in the week of April 26, 2011. The SMP-2 rig and the Schlumberger wireline unit have been used in tandem with the Company-owned Cardwell work-over rig to advance work on two wells simultaneously.

As previously announced in March, the work program is focused on six high productivity wells in the central area of the Ayoluengo Field (Ayo-4, 5, 32, 36, 37and 46) and will additionally include the perforation of approximately 40 meters of previously untapped reservoir in the Hontomin-2 well on the nearby Hontomin Field.

To date, wells Ayo-4, Ayo-5 and Ayo-32 have been logged. Wells Ayo-4 and 5 have been perforated and both have been recompleted for production. In well Ayo-4 a total of 23.7 meters of new perforations were added and 25.2 meters of existing open perforations re-perforated. In well Ayo-5 new and repeat perforations were 16.9 and 19.9 meters respectively. Re-perforation is intended to help remove scale build-up and increase the area of contact between the reservoir and the well bore.

Wells Ayo-4 and 5 have been returned to production and the completion of Ayo-32 is expected to be concluded within a week. Well Ayo-5 continues to clean up, stable flow rates have not yet been measured, however, based on the electric logs run in the well it is believed that additional production capacity will be achieved over the next few weeks. Well Ayo-4 was placed back on production on the 25 May 2011 and production data is not yet available.

The SMP-2 rig has now been moved to well Ayo-37 and operations are underway with 5 meters of new perforations and at least 28 meters of re-perforating planned. Additionally, an electric down-hole submersible pump will be installed in well Ayo-37 when logging and perforation operations have been completed. The CPS Cardwell rig will shortly be moved to Hontomin-2 to prepare the well for perforating.

Neil Ritson, LGO Chief Executive commented, "We are very happy with our progress so far and remain on time and budget with about 45% of the program completed. It is too early to predict the production impact of the work, however, the amount of previously untested net pay we have been able to access is slightly more than was estimated in the initial plan."


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