MedcoEnergi Encounters Gas at Brazos 437 #1 Well

MedcoEnergi has completed testing at the Brazos 437 #1 well in the Gulf of Mexico. The test showed an estimated 55 feet of net natural gas pay from multiple zones in the middle Miocene Rob-L and Rob-M series sands. The discovery is located approximately 75 miles southwest of Galveston, Texas in 67 feet of water. 7 5/8" production casing was run and set at 8,208 feet. Dual completion operations are currently underway. The company plans to install a caisson and pipeline in order to flow the well to a nearby facility at Brazos block 451. Initial production is expected in 90 to 120 days. MedcoEnergi is the operator and holds a 60% working interest in the project.

MedcoEnergi has also participated in a successful well operated by Red Willow Offshore. The West Delta 52 #1 well located in Louisiana State Lease 18383 encountered 17 feet of net natural gas pay in the Cris K2 sand. The discovery is located in Louisiana state waters approximately 75 miles southeast of New Orleans. Completion operations are currently underway and the operator plans to install a caisson and pipeline in order to flow the well to a nearby facility in West Delta 58. Initial production is expected in 3 4 months. MedcoEnergi holds a 54% working interest in the project.

Dave Gibbs, MEUS' president stated "These discoveries will add significant momentum to our Gulf of Mexico program. We are planning on an active drilling program in 2007. These new discoveries bring our total offshore inventory of producing properties and development projects to 7 active blocks. We anticipate additional drilling on these blocks as well as on other recently acquired leases."

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