Irvine Energy plc, the AIM listed oil and gas exploration and production company, is pleased to announce an update on recent activities, including the commencement of production, within its 162,000 acre portfolio of onshore conventional and unconventional oil and gas projects in the USA.
Irvine Managing Director Aaron Close said, "This is a transformational period for the Company as we develop our prospective oil and gas targets in the US and enter the production phase. With an extensive portfolio already in place, we will now rapidly increase our reserve base through exploration and our cash flow through a ramp up in production as more wells come on stream. We are very pleased with our progress, as our strategy of focusing on shallow, low-cost drilling projects in areas of stacked pay zones and existing infrastructure is proving itself across our portfolio. At our current rate of development, we aim to be producing in our three areas of operation by April."
Attributable production in Oklahoma began January 9 following the completion of the final closing agreements between Metro Energy Group (Metro) and Irvine. Irvine produced 7.973 Million standard cubic feet of natural gas and 76 bbls of oil net to its interest during the month of January. Workover work is under way on three existing wells that did not report production during January. Drilling of the Patriot 3-15, the Priegle 2-10 and Summers 1-3 operated by Metro, as well as the Ross 3-27 operated by Williams Energy, has been completed. Additional drilling and workover programs are under way and will be announced as results become available.
The first of the 3D seismic shoots has been interpreted and the initial well location has been selected. Drilling is planned to begin at the end of February and is expected to take two to three weeks. If successful, the completion processes are expected to take a further three weeks. The well will be targeting primarily oil pay in the Arbuckle formation as an extension of the highly productive Cooley oil field.
The Ares and Udall project areas 3D seismic programs are in progress and the Ares 3D is underway and expected to finish by March. The seismic crew will move directly to the Udall area and begin shooting there upon completion of the Ares. Once completed, processing is expected to take approximately 30 days and interpretation will take an additional 30 days. This is being conducted to identify multiple drill targets in accordance with the Company's development plan.
Niobrara Project Kansas
Following an evaluation program during the second half of 2007, 20 initial wells were selected for development. All of these now have pumping units and gas gathering lines in place. The water disposal permit has been approved and the water disposal well is being prepared for use. The gas sales contracts are in place and a gas compressor is being prepared. Production is targeted at 500 mcf/d net to Irvine, with current prices in the region of US$7.00/mcf. First gas sales are expected in March. Development of the extensive inventory of undrilled well locations in this project is expected to begin in Q2, after production from the initial 20 wells has stabilised and production rates are confirmed to be in line with Irvine's expectations.
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