Bridge Resources announced that its Bridge North Sea Ltd. 100% interest Durango well continues to demonstrate excellent productivity. Flow rates have exceeded the target 30 million cubic feet of gas per day with the well currently producing at approximately 26 million cubic feet of gas and 807 barrels of condensate per day (approximately 5,140 barrels oil equivalent per day). This stable high flow rate is constrained by the maximum amount of condensate that can be handled efficiently by the separator on the production platform prior to delivery into the LAPS pipeline to the onshore Bacton terminal. Bridge is discussing additional equipment upgrades with the platform operator to further increase production levels. Recent gas prices have averaged 63p/therm (approximately US$9.00/mcf equivalent).
An updated National Instrument 51-101 - Standards for Disclosure for Oil and Gas Activities, assessment of reserves and valuation of the Durango well and field will be completed and announced prior to March 31, 2009.
In order to address the amount of gas back-out of existing wells feeding the LAPS pipeline caused by the high pressure and volume Durango well, Bridge has agreed to allocate certain production revenue to such existing legacy LAPS well interest holders in order to make up for the diminished production of such legacy wells during the higher pressure and volume production period of the Durango well. The intention is that Bridge will recapture this production revenue at a future date from such legacy wells in an equitable manner. This back-out issue is being addressed by a formal Joint Reservoir Management Group to confirm equitable gas balancing and repayment procedures.
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