Orion; Oakland County Michigan, 70% NRI
The construction of the surface facilities and the desulfurization units is continuing on schedule, with the concrete now being laid and the sulfur treat towers to be positioned shortly. At this stage the Company has not been delayed by any critical path item and is continuing to move the project forward as rapidly as possible. The Company anticipates the completion of these facilities by the end of June 2007. The flow rate from the well is anticipated to be at least 2mmcfpd net to the Company.
Calvin 36 # 1; Winn Parish Louisiana, 68.75% NRI
A final Nitrogen wash of the well is scheduled for the week of 30 April in order to clean the well bore comprehensively and not damage the producing reservoir zone. Once this is completed, work on hooking up the well will commence. Discussions are ongoing with Smith Operating Co, the field operator on the cost of transportation and processing of the gas. As the gas contains CO2, it will require some processing. A processing facility already exists in the Calvin field a short distance from the 36 #1 well location. The anticipated production rate is likely to be initially around 0.5mmcfpd net to the Company and then rising over time as is the trend in this zone in the Calvin field.
The Company has been involved in a legal dispute with Brammer Engineering, the former engineering contractor and nominated operator for the 36 #1 well. An audit was conducted of the Brammer books and it was discovered that Brammer had over-billed Meridian by some $89,953.22. These funds have been returned to Meridian, as of Thursday 26 April, through the legal action.
Additionally the Company is currently seeking all legal and accounting costs to be covered by Brammer. The Board will inform the market as events develop.. The Company has undertaken additional engineering with a new contractor, West Mountain Operating, Marshall TX.
Milford 36 (JARCO), Oakland County Michigan, 25% NRI
The well responded extremely well to the use of an explosive perforation device in the lower zone. The well has approximately 103 feet of net pay zone with good porosity. The Company plans to utilize the same explosive perforation for the upper zone to pull the prospective production rate to approximately 0.25mmcf/pd net to Meridian. The Company is now putting that work in place and additionally is likely to purchase additional working interest in this well from co owners. The Company is reviewing the logistics involved (the Explosive Perforation Company is based in Shreveport Louisiana) and all efforts are being made to complete the additional perforations as soon as is possible. Given the relatively low cost of the perforations it is felt by the Company that this approach is the most prudent and that a far better producing well will result from this treatment.
CBM, Warrior Basin Alabama
Work is ongoing to compile the budget and equipment for a five-well pilot program that will likely take place in Q4 2007 or early Q1 2008. In addition, detailed discussions are taking place with a major land owner in the area for the lease, on a royalty basis, for a substantial portion of the project area.
Work is ongoing with Ensight Partners in Shreveport Louisiana for the drilling of a deep test well to gain production from the Terryville A and B sands. A test well location has been selected and the second issue of looking at the potential re-entry of existing well bores and the possibility of fraccing is also being examined. Once a decision has been made as to the approach to this initial well we will inform the market accordingly, althought we are targeting Q3 2007 for the staking of prospective locations.
The Company has retained an Adelaide-based geological and operating consultant group to commence work on the preparation of the test well for the Dolores prospect and to examine additional prospectivity of the PEL 82 acreage also owned by the Company. The Company anticipates commencing work on the test well during Q4 2007.
It should also be noted that the Company is in early stage discussions for either the sale or farm out of a portion of the Dolores prospect and other Australian acreage.
Meridian is an oil and gas exploration and production company with key onshore assets in the United States and Australia. It is headquartered in London, with offices in Houston, Texas, and Adelaide, Australia.
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