"Our last four discovery wells in Poland, Zaniemysl-3, Sroda-4, Winna Gora-1 and Roszkow-1, have averaged over 18 Bcfe per well in initial proved reserves," said Andy Pierce, Vice President of Operations. "These initial proved reserves are about ten times larger per well than typical U.S. onshore gas wells. Results like these make exploration in Poland very attractive. We plan to expand our exploration efforts in Poland and hope to repeat this success."
The Company also reported the net present value of estimated discounted future cash flows (PV-10% value) of $42.3 million ($1.13 per share) net to its interest from the two new wells as of January 1, 2007. This figure also represents a significant addition to the Company's existing proved reserves value, which was $63.8 million at that date.
Building on two previous gas discoveries, Zaniemysl-3 and Sroda-4, the two newest discoveries (Winna Gora and Roszkow-1), bring the Company's success rate in its core area to 80%. The two new wells, plus the Sroda-4 well, all located in the Company's core area in western Poland and all 49%-owned, have been completed as new discoveries but are not yet producing. They will be added to the Company's production base following permitting and construction of production facilities. Sroda-4 and Roszkow-1 could come on line late 2008 or early 2009, and are anticipated to begin production at rates of 5 Mmcf/d (gross) and 10 Mmcf/d (gross), respectively. The Winna Gora well is capable of another 4 Mmcf/d (gross), although the Company is considering a horizontal leg to allow higher production rates. The Company's 49% share of projected new production from these three wells could be nearly 10 Mmcf/d, an important addition compared to its current 6.0 Mmcfe/d production in Poland.
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