Magellan Highlights E&P Activities in Australia, UK

Magellan Petroleum Corporation has issued an activities report for the quarter ended June 30, 2008.

OIL & GAS SALES

Natural Gas

The Company's share of natural gas sales during the quarter ended 30 June 2008 decreased by 3% from the June 2007 quarter.

Crude Oil and Condensate

The Company's share of crude oil and condensate sales during the quarter ended June 30, 2008 increased slightly from the June 2007 quarter.

PRODUCTION AND DEVELOPMENT ACTIVITIES

AUSTRALIAN PRODUCTION

Palm Valley Gas Field (PL 3) – Amadeus Basin NT (52.023% Interest)

The Palm Valley gas field which is operated by Magellan produced an average of approximately 8.0 million cubic feet per day (MMcf/D) of natural gas for sale during the June quarter. The Palm Valley Joint Venture’s objective is to maximise gas production from the existing facilities while maintaining a safe and efficient operation, conducted in accordance with good oil field practice.

Mereenie Oil and Gas Field (PL 4 & 5) – Amadeus Basin NT (35% Interest)

The Mereenie oil and gas field which is operated by Santos Ltd. produced an average of approximately 38 MMcf/D of natural gas and 825 barrels of oil and condensate per day for sale during the June quarter. No major projects were undertaken on the Mereenie field during the quarter.

Nockatunga Oil Fields (PLs 33, 50 & 51, ATP 276P) – Cooper Basin Qld (40.936% Interest)

The Nockatunga oil fields which are operated by Santos Ltd. produced an average of approximately 750 barrels of oil per day (BOPD) for sale during the June quarter. The Maxwell 5 appraisal well which was drilled in October 2007 on the Maxwell oil field in PL 50 was tied into the field facilities and brought online in April 2008. The well produces oil from the Murta Member.

Following the success of the Dilkera North-1 well which was drilled in 2007, the Murta Formation in the previously shut-in Dilkera 2 well in PL 51 was re-perforated and successfully fracture stimulated. A flowline was installed, which ties the well into the Muthero field facilities. The well was successfully brought back on production in May 2008.

Kiana Oil Field (PPL 212) – Cooper Basin SA (30% Interest)

Production from the Kiana-1 well averaged 52 BOPD during the June quarter. The well is currently producing only from the upper Patchawarra Formation zone.

Aldinga Oil Field (PPL 210) – Cooper Basin SA (50% Interest)

Production from the Aldinga-1 well is continuing at around 12 BOPD. There are no current plans to develop the field further.

CANADIAN PRODUCTION

Kotaneelee Gas Field, YT (2.67% interest)

Magellan has a 2.67% carried interest in the Kotaneelee gas field in the Yukon Territory of Canada. Devon Canada Corporation is operator of this partially developed field which is connected to a major pipeline system.

EXPLORATION ACTIVITIES

UNITED KINGDOM EXPLORATION

The company was successful in its bidding for Petroleum Exploration and Development Licenses (PEDLs) under the 13th UK Landward Licensing Round. Magellan and its joint venturers have accepted offers for seven PEDLs in the Weald and Wessex Basins of southern England, six of which will be operated by Magellan.

Elsewhere in the Weald Basin, Magellan (40% interest) will participate in the Markwells Wood-1 exploration well in PEDL 126 later in 2008. Northern Petroleum, operator of the PEDL 126 Joint Venture, received planning approval in May to drill the well from a site to the north of Forestside in West Sussex. Site construction for Markwells Wood-1 is anticipated to commence early in the fourth quarter of 2008, with drilling to take place
shortly thereafter.

The Markwells Wood-1 well will target a prospect that is interpreted to be an eastward extension of the currently producing Horndean oil field. Analysis of data from, and between, the Horndean and Singleton oil fields which lie some 15 km apart indicates they are in essence the same interconnected oil accumulation. Markwells Wood is the first of two locations within the licence where structures have been mapped above the interpreted
common oil-water contact.

Magellan holds interests (ranging from 22.5% to 50%) in seven other exploration licences in the Weald-Wessex Basin (PEDLs 098, 099, 125, 152, 153, 154 and 155), which are also operated by Northern Petroleum. Elsewhere in the Weald Basin, PEDLs 135, 136 and 137 are held and operated by Magellan with a 100% interest. Well sites have been selected and applications for local council planning consents for the drilling of two prospects in PEDL 135 and PEDL 137 in 2009 are in preparation.

 

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