“This transaction is a win-win for both companies,” said Guma Aguiar, Leor Energy CEO. “There are numerous advantages to being joint owners with EnCana in the Amoruso Field, not the least of which is having one of North America's leading natural gas producers as the operator of a drilling program which is expected to have eight rigs running by the end of the year. We are very excited about our ongoing relationship with EnCana and believe they have done an exceptional job as an operator and appreciate the role they have played in Leor become one of the fastest-growing privately held energy producers in the United States.”
In the Amoruso Field, Leor and EnCana now have seven wells producing at a gross rate of approximately 65 million cubic feet per day (MMcf/d) and await completion of three more wells. With four rigs currently running in Amoruso Field and eight rigs expected to be operating in the next few months, Leor and EnCana expect to have 22 wells drilled by the end of 2006.
Leor and EnCana have incorporated significant changes in well drilling and completion techniques over the past year, leading to the significant success of three recently completed wells, which tested at 32 MMcf/d, 19 MMcf/d, and 15 MMcf/d, respectively. The well that tested at 32 MMcf/d is currently producing from a single zone in the lower Bossier formation. Leor believes this well to be among the most prolific onshore wells producing from a single zone in North America.
In another development, Leor used a portion of the proceeds to retire the $30 million 10-percent senior secured note, due in 2008, provided by Amaranth Partners LLC. With payment of this note, Leor has no outstanding debt on its balance sheet.
Leor Energy L.P. is engaged in the acquisition, development, exploitation, and marketing of oil and gas properties. Based in Houston, Leor is one of the fastest-growing privately held exploration and production companies in North America.
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