Commercial oil shows found in NWR No. 16
Belle Exploration (Belle), the field operator, has advised that the second Northwest Rogers well the NWR No.16 was successfully drilled to a total depth of 1,614 feet (512 meters). A dual induction sonic log from 1,606 feet (510 meters) to the base of the surface casing of 169 feet and 24 sidewall cores were taken to be analyzed. The log and the cores revealed 22 feet of excellent oil sand in the "3rd Cockfield" at 1,443 feet - 1,464 feet. There is no oil/water contact and the resistivity in this interval reached seven (7) ohms, again like the NWR No.17, is a clear indication of pure hydrocarbons in a very permeable sandstone.
The core and log analyses indicated excellent permeability, making the decision to run production casing and complete the well an easy one.
"Christmas has come early for Pryme shareholders with the success of our second oil development well in the Northwest Rogers Field. This new well gives further confirmation of the strength of this field. These last two wells, based on the existing analogue production in the field, should boost net cash flows for Pryme close to 18% which is significant in our opinion," said Pryme's CEO Justin Pettett. "Coupled with the better-than-expected flow rate of the Coleman No.7, which was drilled earlier last month, we are certainly looking forward to a very strong start to 2007."
Typical production rates from wells in and near the same field completed in the 3rd Cockfield Sand have been 25-35 barrels of oil per day initially, with a sustainable rate of 18-22 barrels of oil per day over a thirty year period. At a sustained production rate of 20 barrels of oil per day and a US$60 oil price, this additional well should generate approximately US$66,500 per annum in operating income (approximately a 9% increase per well in total cash flow for Pryme) net to Pryme's interest. Pryme has a 21.85% working interest (16.39% net revenue interest) in the NWR No.16 well.
Increasing flow from Coleman No.7
The Coleman No.7 development well was completed and brought into production seven (7) days ago with flow rates increasing daily to its current level of 65 barrels of oil per day with no water on an 11/64th choke and tubing pressure of 125 pounds. Most Middle-Wilcox wells do not produce without pumping units or other stimulation. In this case, the well is flowing on its own. We expect the rate to level out somewhere between 65 and 75 barrels per day as is the case with the other Coleman wells in the Routh Point field that produced in a similar manner in their initial phase.
The Coleman No.7 was drilled to a depth of 4,500 feet (1,371 meters) and encountered shows of oil in eight Wilcox sands, the G-4, G-3, F-2, E-3, C-2, B-4, B-2 and A-2 sands. The well is currently flowing from the C-2 formation with three (3) additional sands "up the hole" for future production. The successful completion and production of oil in the Coleman No.7 opens up another development well location to the northeast named the Coleman No.8 in order to test the F-2 sand. The F-2 was found in the Coleman No.7 and it is expected that the No.8 will effectively test the F-2.
Pryme has a 13% working interest (9.75% net revenue interest) in the Coleman No.7.
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