Ivory Energy Inc. announced that further to our May 20, 2008 news release, the discovery gas well at Obed, Alberta is currently being pipelined and is expected to be on production by the end of August.
Ivory initially had a 10% working interest in the gas well and has finalized a farm-in agreement for an additional 4% for a total of 14% working interest in this gas well at no additional cost to Ivory. This sweet gas zone flowed 11.3 mmcf of natural gas over a 48 hour test (averaging 5.46 mmcf/day) with peak rates of 10.5 mmcf/day.
There was no discernable pressure depletion in the well at the end of the test. Ivory's operator has delivered an independent notice of operations to Ivory and commenced drilling a development well offsetting the discovery gas well. Ivory has a 20% working interest in this offset well.
Ivory has stabilized oil and gas production, primarily from its Saskatchewan properties, and during July, sales were 610 boepd and expected to increase due to the commencement of the well restarting program. July sales had an estimated wellhead oil price of $96 per barrel.
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