The company has entered into a contract for a rig to drill its ST 786 No. 12 well on its Indian Point prospect and is scheduled to arrive in December. This prospect is also located in the Nueces Bay project area, immediately east of the above referenced well. The ST 786 No. 12 well will be drilled to approximately 14,500 feet MD and will also target lower Frio sands. Meridian has a 49% working interest in this prospect and is the operator.
The BP America No. 1 well is from one segment of the south Texas Gulf Coast properties that were recently purchased from Vintage Petroleum LLC. In addition to the wells mentioned above, the company anticipates drilling, and/or participating in at least three to four more wells in this region during the upcoming quarters.
Other operating updates:
The company expects to mobilize two rigs into its East Texas Austin Chalk/Woodbine Play area during the first half of December 2006. The first rig will commence the drilling of two horizontal laterals from the existing vertical wellbore in the Katherine Leary No. 1 well. The second rig will move onto the BSM No. 3 well. After the two wells' laterals are drilled, the company will retain one rig in the area for continued development of the play and anticipates placing its two rigs in the area upon completion of fabrication during mid-year 2007. Production from the BSM No. 1 well continues to be on track with other higher producing wells in the area and is currently at a gross rate of 10 Mmcf/d and 320 barrels of oil.
The Lake Arthur Reclamation No. 1 well on the company's North Grand Lake prospect in Cameron Parish, Louisiana is currently at a depth of approximately 14,600 feet MD, where the last liner is being set with plans to drill to 16,000 feet MD, to test the main Marg sand. The company has a 55% before casing point (64% after casing point) working interest in this well, and the gross unrisked reserve target is between 25 and 50 Bcfe.
The first of six wells, the salt water disposal well, in the Hunton/Woodford De-watering Play in north central Oklahoma is near its total depth of 9,200 feet. Once compete, the rig will move immediately to its next location to spud the initial exploration/exploitation well to test the first of four separate areas of the play. The company, which will operate the field, owns approximately 19,000 acres in the area and has targeted potential reserves for this play of approximately 30 to 40 Bcfe, gross unrisked. Meridian will own a 92% working interest position.
In the Biloxi Marshland area, the natural gas transmission company that takes gas from three of the four field production facilities has begun the scheduled maintenance of its pipeline. This maintenance, which started on November 13, will cause the shut-in of several wells in the Biloxi Marshland field for an estimated period of up to one month. The amount of production being shut-in during that time is estimated to be 12 Mmcf per day net. During this period, Meridian will make repairs to the three facilities as well as assist the crews performing line maintenance in an effort to expedite the return to production of our wells in a timely manner.
The Meridian Resource Corporation is an independent oil and natural gas company engaged in the exploration for and development of oil and natural gas in Louisiana, Texas, and the Gulf of Mexico. Meridian has access to an extensive inventory of seismic data and, among independent producers, is a leader in using 3-D seismic and other technologies to analyze prospects, define risk, target and complete high-potential wells for exploration and development. Meridian is headquartered in Houston, Texas, and has offices in Tulsa, Oklahoma as well as a field office in Weeks Island, Louisiana.
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