American Petro-Hunter reported that the #1 Lutters Well has been in production for a week and that the first oil shipments for sale have occurred.
The well has been pumping oil at an Initial Production Rate (I.P.R.) of 108 barrels per day (4.5 barrels per hour) at the well head with no water. The actual oil volume being pumped into the tanks is over 90 barrels per day as pumping distance to the tank battery is approximately 2,000 feet. The tank battery was positioned strategically in order to maximize future efforts as the new discovery becomes fully developed. As reported previously, due to the expected increase of oil production over the original estimates, an additional storage tank may still be installed at the site battery in order to allow for 600 barrels of oil storage capacity.
Of significance, N.C.R.A. (National Co-op Refinery Assoc.) of McPherson Kansas, the oil purchaser, has already pumped the tanks and sent two shipments of oil for sale from the Lutters lease. American Petro-Hunter expects that the first revenue checks from the Lutters oil production will arrive to the Company's interest, in August as payments are typically held 30 days by the purchaser.
The Company will report when further data on daily rates are received from the operator and will closely monitor the well production over the next 30 to 60 days. The well should stabilize over a short period of time which will allow for a more in-depth evaluation of future rates with a higher degree of precision. Oil production rates may ultimately differ from those calculated or anticipated; therefore oil pumped to the tanks is the most accurate assessment of any early stage producer.
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