Leni Gas & Oil has provided its monthly production update for April 2009.
During April the Company's direct and indirect monthly production totaled 15,539 boe (average 518 boepd) which was 12% reduced from March (17,753 boe) due to scheduled development programs in Spain and Hungary with 30% of total Company production planned offline, and restricted production in the Gulf of Mexico with pipeline system unavailability. The monthly production update from all countries of operation is summarized as follows:
The Ayoluengo Oilfield (100% LGO) in northern Spain, through LGO's 100% ownership of Compañia Petrolifera de Sedano, S.L. produced net to LGO 3,885 bbls of oil and 974 mmscf of gas during the month. Net LGO production in barrels of oil equivalent totalled 4,047. Monthly production was similar to the previous month with over 60% of the production planned offline due to the execution of the final stage of the first phase field stimulation program which shall continue to mid June. The final stage of the field stimulation program is rehabilitating all wells with the first major cleanout and perforation re-opening program in 20 years. A 100% improvement in production is targeted at completion of this stage with improved productivity from the existing open perforations and the re-opening of currently blocked zones. The program shall also prepare all wells for a major perforation program in early third quarter to perforate 400 meters of undepleted zones.
US Gulf of Mexico & Lower 48
The interests held by Byron Energy (28.94% LGO) in the US Gulf of Mexico and Gulf Coast is producing at a restricted rate of 5,000 boepd gross from the Eugene Island field as announced by the joint venture operator on May 11, 2009. Monthly production was restricted from the average of 6,000 boepd due to reduced gas sales pipeline system availability. LGO's indirect interest in the Eugene Island field through Byron Energy approximates to an effective net LGO monthly production in barrels of oil equivalent totaling 10,875. As announced on April 8, 2009, LGO has completed a Heads of Agreement with Byron Energy to transfer the Company's shareholding in Byron Energy from an indirect to a direct ownership of its US Gulf of Mexico oil and gas assets.
The Penészlek Gasfield (7.27% LGO) in eastern Hungary, through LGO's 7.27% ownership of PetroHungaria Kft resumed production on April 29, 2009 with completion of the Pen-104a sidetrack, which targeted a higher part of the structure to maximize recoverable reserves. Stabilized production of 3 mmscfd gross was reported on May 5, 2009. Production net to LGO totaled 0.309 mmscf of gas and no condensate during the month. The Gasfield produces no oil. Net LGO production in barrels of oil equivalent totaled 52. The production schedule of ZalaGasCo Kft (14.74%) LGO) in western Hungary will be announced in due course.
The Icacos Oilfield (50% LGO rights) located on the Cedros Peninsula of Trinidad, through LGO's 100% ownership of Eastern Petroleum (Australia) Pty Ltd produced gross 1,130 bbls during the month with almost 10% of production offline due to planned well interventions. The Oilfield produces no gas. Net LGO production in barrels of oil equivalent totaled 565.
Leed Petroleum third party discussions
LGO also notes yesterday's announcement from Leed Petroleum ("LDP") subsequent to the Company's announcement on May 11, 2009. LDP announced they have had discussions with the third party who notified interest on May 8 relating to the purchase of LDP shares and have decided not to continue any further dialogue regarding the possible purchase of LDP shares. LGO retains an indirect interest and exercise option in LDP properties through a 28.94% shareholding in Byron Energy Pty Ltd.
David Lenigas, Executive Chairman, commented, "As forecast April reported a similar Company production schedule as March due to planned major development works in Spain and Hungary with 30% of the total production planned offline due to scheduled development programs in half of LGO's operations.
"In Spain, the last stage of the first phase stimulation program is underway which is rehabilitating all wells to deliver major well productivity improvements in existing production zones and through re-opening blocked perforation zones. This program is due to complete by mid June and is targeting at least one third of our end 2009 overall production target of 1,500 bopd. The second phase stimulation program due for completion in summer 2009 is targeting most of the remainder of this target.
"In Hungary, the PetroHungaria joint venture successfully reinstated production from the Penészlek Development Area at the end of the month with stabilized production of 3 mmscfd and we expect to report a full production schedule for May. In Trinidad the majority of the planned well interventions were completed to resume near stabilized production.
"The Company expects the May production schedule to be significantly higher than April as full production from Hungary resumes and Spain returns some of the rehabilitated wells to production. In the near term the Company expects to release the full production schedule for the Gulf of Mexico interests on completion of the previously announced indirect to direct ownership conversion."
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