Leni Gas & Oil plc (LGO), the AIM listed international oil and gas exploration, development and production company, today gives its monthly update for May 2009.
During May the Company's direct and indirect monthly production totaled 18,045 boe (average 583 boepd) which was 16% increased from April (15,539 boe). Due to scheduled major development programs in Spain and restricted production in Hungary and the Gulf of Mexico 30% of company production is offline (20% planned programs, 10% restricted rate). The production schedule is expected to return to near full capacity in June with completion of the Spain expansion program and unrestricted operation of Hungary.
The monthly 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 5,540 bbls of oil and 1.1 mmscf of gas during the month. Net LGO production in barrels of oil equivalent totaled 5,723. Monthly production was slightly higher than the previous month with over 45% 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, with the latter showing signs of reservoir re-pressurization from the water injection campaign. The program shall also prepare all wells for a major perforation program in third quarter to perforate 400 metres 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 11 May 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 08 April 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 produced net to LGO totaled 5.15 mmscf of gas and 0.98 bbls of condensate during the month. The Gasfield produces no oil. Net LGO production in barrels of oil equivalent totaled 859. Due to restricted capacity in the third party gas transportation line for a few days approximately 25% of planned production was offline during the month. 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 1,175 bbls during the month. The Oilfield produces no gas. Net LGO production in barrels of oil equivalent totaled 588.
"In Spain, the last stage of the first phase stimulation program continues to deliver major well productivity improvements in existing production zones and through re-opening blocked perforation zones. This program 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. We are excited also by early signs of re-pressurization of the reservoir from the long term water injection program.
"In Hungary the Penészlek Development Area returned to near full production since completion of the Pen-104a sidetrack at end April although with a few days of production restrictions due to third party gas transportation capacity. In Trinidad stabilized production continues.
"The Company expects the June production schedule to be a step change higher than May as full production from Hungary is planned and Spain returns about half of the rehabilitated wells to increased production levels. 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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