Ivory Energy Achieves Milestone Production from Canadian Assets
Ivory Energy has achieved a milestone of producing at rates greater than 1,000 boepd. Recent increases in production are the result of drilling successes at Obed, Alberta and Silverdale and Furness, Saskatchewan as well as a positive response from the Silverdale waterflood and various recompletions and workovers of certain wells. Oil and gas sales for September 2008 were approximately 690 boepd with an estimated wellhead price of $79.75 per barrel for oil.
Production from our Saskatchewan oil properties is approaching 900 boepd. This production combined with the addition of the first Obed gas well, is approximately 1,050 boepd. Based on additional wells in Saskatchewan and the second successful Obed gas well coming on stream, Ivory is confident that it will achieve its previously announced guidance of 1,200 to 1,400 boepd sales by volume for the month of December 2008. The new wells at Obed, Silverdale and Furness not only increased production but also added significant new reserves to the Company.
- The Obed discovery gas well is currently producing approximately 7.5 MMcf/day plus condensate. Testing of the Obed development gas well is underway. Production from this development well is expected to come onstream during November.
- Ivory has cased the first five wells of its development program and placed three of these wells on production. Two oil wells are awaiting completion and equipping.
- Ivory has identified a potential new oil pool beneath the waterflooded zone at Silverdale and Ivory is presently testing this zone for commercial production. Ivory's 3D seismic survey over this part of the pool indicates significant aerial extent to this new pool. Ivory drilled an oil well at Furness that had initial production in excess of 200 boepd. The oil well has a high fluid level and is presently producing at 175 bblpd with no water. Based on 3D seismic, Ivory has delineated 3 development well locations offsetting this initial well. Additional development wells are likely following additional seismic interpretation and field development.
- The expanded Silverdale waterflood has demonstrated positive results and production declines have been significantly curtailed. Additional enhancement measures are being taken to increase daily production and recovery factors in this waterflood during the next several months.
As a result of the recent commodity price declines, Ivory has postponed its planned drilling program in Saskatchewan. Ivory believes this is a prudent approach given the uncertainty of today's oil price. Ivory will continue to monitor the wellhead oil price and is ready to continue drilling should the commodity prices improve. Routine field operations, including minor workovers, will continue as Ivory maintains its production with good production practices.