As discussed in Pryme's announcement of 20 March 2008, oil and gas production from the 'C' and 'Price Sands' formations in the second well (Grable 15-1) in our Raven project have been successfully comingled and are being delivered to market. Production rates have been increasing and current production is approximately is 760 Mcf per day of gas and 20 barrels per day of condensate.
At these rates, and using realised prices of $6.00 per thousand cubic feet (Mcf) of gas and $90 per barrel of condensate, Pryme's net monthly revenue from this well is approximately US$50,000. Flow rates from wells in the Cotton Valley Formation do usually decline and then flatten out after reaching stable production. However, if the current production rates can be sustained, this equates to a 30% increase in Pryme's revenue from all projects and underlines the importance of Raven's contribution to Pryme's income.
The third well in the Raven project is scheduled to be drilled mid-May. When drilled, completed and producing it will provide sufficient information for a reservoir engineer to prepare a report on proven and proven undeveloped reserves for the project.
Of additional relevance to the Raven Project, the large US independent oil and gas company Chesapeake Energy recently announced a major natural gas discovery in the Haynesville Shale in Northern Louisiana. Chesapeake says that the size of the discovery and ultimately the trend at this stage could range from 7.5Tcf to 20Tcf with well depths between 10,000 feet to 12,000 feet. The discovery has sparked intense leasing activity in the area.
Pryme's Managing Director, Justin Pettett, said, "Our Raven project acreage is on trend with the discovery and contains the Haynesville formation although it is unknown yet if the Haynesville is productive on our acreage. Time will tell and, if this play develops eastward toward Lincoln Parish, it could increase the value of the 4,000 acres we have under lease for the Raven project. We will keep shareholders informed of any further relevant developments."
Natural gas and oil closed on the NYMEX at $10.05 and $109.84 respectively.
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