Edge Petroleum Sees Increase in Production
Edge Petroleum provided an update on its operating activities through the end of the second quarter, a summary of recent activity and expectations for future activity. Through the end of the second quarter, Edge has spud a total of 34 wells. Six of the wells spud this year are outside operated wells in the Fayetteville/Moorefield Shale play which are waiting on a rig to drill the horizontal section and for completion. As of June 30, 2007, a total of 19 wells have been logged with only two dry holes for an apparent success rate of 89%. Since the end of the quarter, seven additional wells have been logged, all apparent successes, raising our apparent success rate to 93%. An additional six wells have been spud. Currently, 13 wells are in various stages of completion, four wells are currently drilling and three drilling rigs are moving onto new locations. In the third quarter, a total of 20 to 30 wells are expected to be spud.
Our second quarter wells include 10 wells in south Texas, one well in southeast Texas, two wells in Arkansas and seven wells in New Mexico. A detailed discussion of many of these wells was provided in our press release dated June 19, 2007.
Production for the second quarter was an estimated 6.4 Bcfe, a record level for Edge, an 11% sequential increase from the previous quarter and a 42% increase over the same quarter in 2006. This represents an average of 70 MMcfe per day. Edge's estimated production exit rate as of June 30, 2007 was 77.3 MMcfe per day.
Edge currently has three wells drilling in Texas. Two rigs are currently working in south Texas in the Flores/Bloomberg Field. They are drilling the Bloomberg 62 (Edge Operated, W.I. 32.5%) and the State-Slick ``B'' 12 (Edge Operated, W.I. 50%). We expect these two rigs to work continuously in this field well into 2008. In our Chapman Ranch Field, one rig is drilling the Chapman Ranch No. 23 (Edge Operated, W.I. 88%) and one rig is moving onto location at the Chapman Ranch No. 15 (Edge Operated, W.I. 88%). We expect these rigs at Chapman Ranch to work continuously in this field well into 2008. In southeast New Mexico, one rig is working at the Southeast Lusk 34 No. 5 (Edge Operated, W.I. 50%).
Also in south Texas, at our non-operated Encinitas Field where drilling plans for last year got deferred, the operator has approved three new well proposals from Edge. Edge will have a non-operated, 22.5% W.I. in each of the Lopez #25, Lopez #26 and the McGill Bros. NCT #105 wells. These wells are expected to be drilled back-to-back as soon as a rig can be placed under contract.
In the Fayetteville/Moorefield Shale Play in Arkansas, two rigs are moving to new locations and should spud by the end of the week. The wells are the Simmons 1-21H (Edge Operated, W.I. 63.6%) and the Townsend 1-27H (Edge Operated, W.I. 66.4%). We also expect these two rigs to work continuously in this play into next year. Edge how has State approval for a total of eight, 640 acre operated drilling units, and is seeking approval for another two.
John W. Elias, Edge's Chairman, President and CEO, reported, "Our drilling program accelerated as we progressed through the second quarter, and we are experiencing good results. We have spud nine wells in August, well on our way to our target of 20 to 30 wells for the quarter. We continue to be very optimistic about the opportunities we are seeing in several of our focus areas, especially in the Flores/Bloomberg Field, Chapman Ranch Field, Encinitas Field and the Fayetteville/Moorefield Shale Play. We are adding an additional rig at the Chapman Ranch Field and are considering adding additional rigs to these other fields based upon our inventory of drillable locations and recent results. We expect that continued sequential growth in production should result from these recent and expected future drilling activities. Although we got off to a slower start, after closing the large acquisition early this year, than we had planned, we have recently moved to a new level of sustained activity, which we expect to translate into positive future results."
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