Petrogen Temporarily Shuts In Production at Emily Hawes Field

Calhoun County, Texas
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Petrogen says that in anticipation of Hurricane Rita, natural gas production from the Emily Hawes #3A well (EH#3A) on the Company's Emily Hawes Field property, Calhoun County, Texas, was temporarily shut-in on Wednesday, September 20th as a precautionary measure. Emily Hawes field is located on Matagorda Island, which is situated on the Texas Gulf Coast. Matagorda Island and Emily Hawes Field sustained no reported damages from Rita. Natural gas production and sales from the EH#3A resumed on September 26th, 2005 and the Company anticipates that sales from the well will be made at similar or higher prices to those received for gas sales from the property prior to the shut-in as noted, previously reported to range between $10.00 and $15.05 per Mcfg. Petrogen's natural gas from Emily Hawes Field is sold into the Zone 1-FGT, which is currently paying at daily pricing of $17.95 per Mcfg.

In preparation for Rita, Petrogen's management re-assessed its options related to oncoming operational objectives. As reported in the Company's September 14th, 2005 news release, Petrogen received input from three independent compression services companies to analyze the Company's EH#3A well data. High line pressures on the Northern Natural Gas/Matagorda Offshore Pipeline System sales pipeline have resulted in suppressing optimum daily natural gas flow rates from the EH#3A. Results from the analyses indicate that production flows from the EH#3A can be increased to approximately 800 Mcfgd with one stage of compression, doubling current average daily rates. Hanover Compression Company of Houston, Texas has been contracted whereby crews will be mobilized to Emily Hawes Field to continue implementation and completion of the compression initiative on the EH#3A well as first reported. In its assessment of the Company's current operational objectives, management has shifted its focus for drilling plans on the EH#1A sidetrack well at Emily Hawes Field as reported in the Company's September 15th, 2005 news release, re-focusing its attention on developing its Tiller Ranch Field property, Jim Wells County, Texas.

Petrogen plans to mobilize drilling crews to the Tiller Ranch Field and commence operations on the Tiller #1 well, the first new well drill of up to six potential new wells to be spudded at Tiller Ranch Field during Q4-05 and Q1-06. New wells on Tiller Ranch Field will test multiple previously producing pay sands in the Vicksburg and Frio formations. Due to the accelerated scheduling, management believes that it may be able to spud as many as three new wells at Tiller Ranch prior to year-end. Natural gas wells in the area have average production histories of approximately eight to ten years with cumulative production ranging from approximately 2.6 to 3.5 Bcfe per well. Extensive subsurface control, provided by approximately twenty-five wells located on or adjacent to the Tiller Ranch lease indicate that potentially up to 18 Bcfe previously producing reserves are recoverable.

Petrogen's Chairman and CEO, Sacha H. Spindler stated "Petrogen's operations have undertaken limited down-time from Rita and we are well positioned to move on to Tiller Ranch Field at this time. We are extremely excited about diversifying the Company's operations in the Texas Gulf Coast, an area that we have built a platform of expertise and success upon to date." Mr. Spindler added, "We anticipate results from Tiller Ranch Field that could provide a substantial increase in economic benefit to the shareholders of the Company in a much shorter time frame than initially anticipated due to the accelerated development schedule that we've adopted for the property and the viability of the prospect as a key contributor to the Company's near term growth objectives."

Anticipated results from the potential success of the drilling plans at Tiller Ranch Field could potentially increase Petrogen's daily production, monthly revenues and producing reserves significantly over the coming two quarters, which would substantially add to Petrogen's existing foundation of current revenues from its Emily Hawes Field.

Tiller Ranch is located within the Tom Graham Field, Jim Wells County, Texas, which has produced a total of thirteen billion cubic feet of natural gas (13 BCFG) from twenty-five distinct sands. In addition, Tom Graham Field has produced six million eight hundred thousand barrels of oil (6.8 MMBO) from six pay sands. The majority of wells previously developed on the Tiller Ranch Lease were drilled during the 1940's and 1950's when local natural gas prices were in the 2 to 10 cent per Mcfg range. These extremely low gas prices resulted in limited development of the natural gas reserves on the Lease, providing for the substantial infill and step out drilling potential currently anticipated from Tiller Ranch Field by the Company.

Mr. Spindler further stated, "All of us at Petrogen would like to convey our deepest concern and regard for those families affected by the recent hurricanes, and wish everyone a speedy recovery."

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