Following the drilling and completion of the CL&F No. 71 well, the rig utilized to drill the CL&F No. 71 well was mobilized to another prospect within the Company's Ramos project area to drill the Avoca #5-2 well. That well is currently drilling at approximately 8,700 feet and will be drilled to a total depth of approximately 11,800 feet. The Company owns a 92% working interest in the Avoca #5-2 well. This represents a new core area for Meridian in its expansion of its exploration concept utilizing its internal processing capabilities to develop similar exploration opportunities to those discovered at the Thornwell and Biloxi Marshlands fields. Meridian has scheduled additional drilling activities in this project area and is planning to utilize between one and two rigs in this region as part of its exploration program during the remainder of 2005 and 2006.
The Company today completed operations on its Thibodeaux #3 well in its Ramos producing field and expects to flow test the well this week with plans to place it on production immediately thereafter. The drilling rig utilized for the recompletion activities is currently being mobilized to drill the Company's CL&F No. 72 well in the Ramos project area. That well will be drilled to a total depth of 13,500 feet and the Company owns a 92% working interest.
In the Weeks Island field, the Company has recently completed workover operations on its Myles Salt Company No. 31 well to repair corroded down hole tubing. The Company expects to test the well within the next seven days and place it back on production immediately thereafter. Meridian has a 100% working interest in this well.
In the Company's Biloxi Marshlands ("BML") project area, the Company has drilled 31 wells since inception of the project which have tested various potentially productive horizons, including the Deltaic, Tex W, Big Hum, Cris "I", Cib Op, and Rob L sand sections. The Company has placed on production 19 wells representing an overall 61% success rate. Most recently, the Company expanded the BML field to the extreme southeast quadrant of the play known as the Hornet's Nest area. Of five wells drilled to date in the Hornet's Nest area, two were discoveries, two were dry holes, with one temporarily abandoned for further evaluation of apparent pay indicated by electric logs in the Tex W sand section. The discoveries were placed on production during January 2005 at daily flow rates of approximately 3.7 Mmcfe and 4.3 Mmcfe, respectively.
As previously reported, during March 2005 the Company completed its southwestern extension of its gathering system and production facility to tie-in its South Apollo, LA Prejean No. 1 well. The Prejean well was placed on production at initial flow rates of 5.3 Mmcf with no corresponding water production. Meridian owns a 92% working interest in this well.
Other activity in the north central region of the BML play included the drilling of the South Ceres - Lake Eugenie Land & Development No. 31-1 well which encountered sands but not sufficient hydrocarbons to justify a completion. This well is under evaluation for a possible additional well based on the Company's newly merged and processed 3-D seismic received subsequent to the test well.
The Company continues to extend the Biloxi Marshlands play to different areas in an effort to test the five identified sand sections in the area. The most recent well that will test the Deltaic sand section in the northeast quadrant of the play was recently spudded is the String of Pearls prospect, the State Lease 18315 No. 1 well. The well is currently drilling at approximately 2,000 feet and is expected to reach total depth within 7 to 10 days. The rig utilized to drill the String of Pearls prospect is expected to remain in the northeast quadrant of the BML project area and drill additional identified targets in the area immediately after completing operations on this well.
During February 2005, the Company initiated its 2005 3-D seismic data acquisition program in the BML project area. The field work on the 2005 program has been completed and includes 142 square miles of new proprietary data and when combined with the Company's existing 3-D data in the BML project area will include over 750 square mile of 3-D data, of which approximately 480 square miles are proprietary. The Company has recently begun to take delivery of the new data and the data will be processed and merged to create one data set over substantially all of the BML project area.
During January 2005, the Company also drilled its Twin Island - LA Cutler #1 well to test the M19 sand interval. The well was drilled to a total depth of approximately 11,700 feet and failed to encounter commercial hydrocarbons and was subsequently abandoned. The Company had a 92% working interest in the well. In addition, the Company completed drilling operations on its Ferdinand Boudreaux well on the Zwan prospect to its total depth of approximately 13,700 feet to test the Camerina sand interval. The well was subsequently abandoned. The Company had a 59.5% working interest in the well.
During the first quarter of 2005, the Company successfully bid on 14 leases in the State of Louisiana lease sales on acreage in its Biloxi Marshlands project area and has applied for over 53 permits in the area. As an active participant in the leasing and drilling in this region, Meridian has received support of the State of Louisiana with its permits and has been granted 8 permits to drill with the expectations of continuing permitting that will allow it to continue to utilize at least one to two drilling rigs in the BML area on an ongoing basis during the balance of 2005.
The Company expects to maintain an active drilling program utilizing a minimum of three to four drilling rigs focused primarily in the BML project area and other similarly styled plays such as the Ramos Complex. The Company continues to develop new exploration plays and prospects within its region of focus in south Louisiana from its seismic and land asset base consisting of over 8,000 square miles of 3-D seismic data and approximately 300,000 gross acres under leases and options. The Company's current capital expenditure budget for 2005 totals approximately $139 million of which a substantial portion will be devoted to exploratory drilling projects. The Company expects to fund its 2005 capital expenditures program entirely from cash flow and accordingly the Company has hedged a significant portion of its 2005 future production at attractive prices.
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