Evolution Petroleum's Production Up 77% for Fiscal Year 2008
Evolution Petroleum Corporation has reported record production for the fiscal fourth quarter and year ended June 30, 2008 ("Q4 08" and "FY 08").
Sales volumes for Q4 08 were 18,237 barrels of oil and natural gas liquids ("BO") and 53 million cubic feet of natural gas ("MMCF"), or 27,095 barrels of oil equivalent ("BOE"). This is an increase of 230% over sales volumes of 8,210 BOE in Q4 07 and an increase of 183% over the 9,569 BOE sold in Q3 08.
Sales volumes in FY 08 were 40,105 BO and 69 MMCF, or 51,614 BOE, an increase of 77% over total sales volumes in FY 07 of 29,148 BO and no natural gas. EPM substantially increased sales volumes during the periods despite the March 2008 sale of its Tullos properties in Louisiana, which contributed essentially all of the Company's production in FY 2007 and the first half of FY 08. The increase in volumes was driven by EPM's drilling activity in the Giddings Field during the second half of FY 08.
EPM completed its first development drilling phase in the Giddings Field in June of 2008 by bringing on production from the last two wells drilled in its six well program and restoring to production a seventh well. The aggregate initial production rate of the seven wells was approximately 1,500 BOE per day. Due to the normal high initial decline rates and the three newest wells producing for only a limited portion of June, including two of the three best producers in the program, June 2008 production averaged approximately 580 BOEPD (net 468 BOEPD). EPM owns 100% of the working interest in all of the wells.
Robert Herlin, President and CEO, commented, "We are very pleased that our plan to generate near-term growth in production and revenues is on schedule and that our initial drilling program in Giddings has been successful overall. We similarly grew our proved and probable reserves during the year and generated a new development project. Looking forward into FY 09, we are initiating our second re-entry horizontal drilling program in the Giddings Field and continue working to complete our leasing activity in both the Giddings Field and in our Oklahoma gas shale projects. We expect to disclose our reserve changes, FY 09 capital budget and complete financial results over the next month and host a conference call in mid-September associated with the filing of our fiscal year results."
Herlin further commented, "We are pleased that the Delhi CO2 EOR project being operated and funded by Denbury remains on track with first CO2 injection reportedly scheduled to begin in the first half of calendar 2009 and first production response expected late in calendar 2009. We likewise concur with Denbury's unchanged disclosed estimate of recoverable reserves for the project."