Magellan Energy Ltd., an independent oil and gas company, announces that work is progressing on all three Tennessee projects and that the company is anticipating revenues from its current operations for 2008.
Magellan Energy Ltd. has installed a larger pump jack and a 118 engine, which is operating on natural gas, onto the Thomas L. Davidson well. During the last few weeks, logging on the adjoining leases delayed the completion of this project. With the logging now complete, KY-Tenn Oil Inc., the operators of the well, have connected a natural gas line to the well and the well has resumed production for oil. The well is expected to level out at a rate of 5 BOPD. At this rate, with current market prices, the well is expected to generate gross revenues of $150,000USD per annum. Revenue from Magellan's interest is expected to payout the project in 2008 and with continual revenues in the coming years.
Magellan Energy Ltd. is pleased that the work over procedures for Robert Anderson wells is expected to be finalized shortly. The road is currently being rebuilt and electricity is being connected to the property. The new compressor, built specifically for this lease, has arrived from the manufacturer and is expected to be installed and operational in the upcoming weeks. Once operational the Anderson wells will be producing both oil and natural gas. This project is being completed in advance of a new gas pipeline serving the area. Once the new line is in operation this spring, the revenue from this project is expected to increase.
Magellan Energy's President, Mr. Akrivos, said, "We are acquiring a larger interest in the Martin oil and gas field that that is being converted into a waterflood project. In the interim, it will continue to produce oil and gas revenues for the company. We are expecting our first royalty payment for gas sales later this month. We look forward to the completion of the new pipeline to resume our gas sales. Currently our buyer is not able to accommodate the gas due to the high BTU levels. This problem will be rectified when the new pipeline is operational.
"We are pleased with the efforts of our operator for this project and the fact we are staying on schedule. Magellan continues to explore other areas of interest to increase revenues, thereby increasing shareholders' value."
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