Meridian Completes Southern Extension for BML Project



The Meridian Resource Corporation has completed the southern extension to its existing pipeline and facility infrastructure in the Biloxi Marshlands ("BML") project area.

On July 31, 2004, the Company placed its previously announced Ducros et al No. 32-1 well on sales at a current gross rate of approximately 10.3 million cubic feet ("Mmcf") of gas per day (6.7 Mmcf, net) through a 18/64-inch choke with flowing tubing pressure measured at 3,700 psi. In addition, the Company concurrently placed its previously reported BML 22/SL 17980 No. 1 well on sales at a current gross rate of approximately 6.8 Mmcf of gas per day (4.4 Mmcf, net) through a 14.5/64-inch choke with flowing tubing pressure of 4,000 psi.

The second phase of the southern pipeline and facility tie-in has now been completed as well, and today the Company placed two additional wells on line. These include the previously announced BML No. 7-2 well which was placed on sales at a current gross rate of 12.9 Mmcf of gas per day (8.4 Mmcf, net) through a 19/64-inch choke with flowing tubing pressure measured at 3,500 psi. In addition, the BML No. 7-3 well was placed on sales today at a current gross rate of 5.1 Mmcf of gas per day (3.3 Mmcf, net) through a 15/64-inch choke with flowing tubing pressure measured at 3,350 psi.

Electric log analysis of the BML No. 7-3 well reflected gas pay in two separate sands sections in the Cris "I" interval. The well was recently tested from the deeper Cris "I" interval through 34 feet of perforations between an interval of 9,412 and 9,492 feet measured depth at a stabilized gross daily flow rate of 8.8 Mmcf of gas per day through a 22/64-inch choke. Flowing tubing pressure was measured at 2,994 psi and shut-in tubing pressure was measured at 3,626 psi.

The Company is managing the production rates in the BML project area in order to maximize the overall reserve recovery from the existing reservoirs. Current production from the field totals approximately 99 Mmcf of gas per day (62 Mmcf, net) up from 70 Mmcf gas per day (43 Mmcf, net) as of June 30, 2004.

The Company currently has two wells drilling in the BML project area. The BML No. 7-1 ST is being drilled to a total depth of approximately 11,700 feet and is currently drilling at 6,285 feet. The well is a re-drill of a well that experienced mechanical problems and that initially tested at rates of approximately 13.5 Mmcf of gas per day. In addition, the BML 5/SL 17980 #1 well is currently drilling at 3,010 feet and will be drilled to a total depth of approximately 9,200 feet. Both wells should reach total depth within the next thirty days.

During July 2004, the Company began drilling the Hosemann #1 well on the Enterprise prospect. The well is being drilled to a proposed total depth of 18,500 feet and is currently drilling at 11,635 feet. The Company is non-operator of the well and after payout of the drilling costs the Company's working interest is approximately 30%.

Also during July 2004, the Company began drilling the CL&F A-2 well on the North Turtle Bayou prospect. The well is an updip location to a well that encountered mechanical problems. The well will be drilled to a total depth of approximately 15,400 feet and is currently drilling at 10,100 feet. The Company holds a 97% working interest in the well.

In the Weeks Island field, the Company has drilled its Goodrich Cocke #10 well on the Camille prospect to a depth of 9,970 feet and has set pipe through the drilled interval. The drilling rig utilized on the Goodrich Cocke #10 well was mobilized to drill the CL&F A-2 well to satisfy lease requirements on the North Turtle Bayou prospect. The Company has contracted a fourth barge drilling rig to resume drilling operations on the Goodrich Cocke #10 well within the next two weeks. The well will be drilled to a total depth of approximately 11,700 feet. The Company holds a 97% working interest in the well.

Meridian continues to focus on its exploration and exploitation of the BML project area in addition to the development of its Weeks Island field and its other properties which comprise an asset base consisting of approximately 8,000 square miles of 3-D seismic data. The Company plans to begin utilizing a third drilling rig in the BML project area as early as the fourth quarter of 2004 and plans to increase its 2004 capital expenditures budget by approximately 15% from $95 million to as much as $110 million.
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