LGO Increases Production in Hungary, Continues Development in Spain
Leni Gas & Oil has provided its monthly update for June 2009. During June the Company's direct and indirect monthly production totaled 16,845 boe (average 562 boepd) which was 7% decreased from May (18,045 boe).
Due to scheduled major development programs in Spain, planned interventions in Trinidad and production restrictions in the Gulf of Mexico 35% of company production was offline (25% planned development, 10% intervention and restrictions). The production schedule is expected to return to near full capacity in July with completion of an incremental production development program in Spain.
- The Ayoluengo Oilfield (100% LGO) in northern Spain, through LGO's 100% ownership of Compañia Petrolifera de Sedano, S.L. produced net to LGO 3,947 bbls of oil and 1.069 mmscf of gas during the month. Net LGO production in barrels of oil equivalent totaled 4,125.
- Monthly production was slightly lower than the previous month with over 60% of the production scheduled offline due to the execution of the final stage of the first phase field stimulation program.
- A 100% improvement in production is targeted at completion of this stage with improved productivity from the existing open perforations and re-opening of currently blocked zones. The well stimulation program was completed in mid July with a four week production system optimisation program currently underway to maximize productivity of each well.
- The results of the program shall also refine the scope of the next major development program in Q4 2009 to perforate 400 meters of undepleted zones.
- A new oil sales off-take agreement is also currently in the final stages of completion which shall increase both the monthly volume sales and sales price deck.
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. 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.
- Monthly production was restricted from the average of 6,000 boepd due to reduced gas sales pipeline system availability.
- 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 and is expected to complete in September.
- 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 748 bbls during the month. The Oilfield produces no gas. Net LGO production in barrels of oil equivalent totaled 374.
- Monthly production was reduced by 38% due to planned intervention.
- Subsequent to negotiations with the Ministry of Energy of Trinidad new work program commitments has been provisionally agreed to substantially increase production above gross 500 bpd.
- Acquisition proposals have been issued to the joint venture partner (50% rights) to acquire majority rights and change in control of the Oilfield.
- The Penészlek Gasfield (7.27% LGO) in eastern Hungary, through LGO's 7.27% ownership of PetroHungaria Kft produced net to LGO totalled 8.82 mmscf of gas and 1 bbl of condensate during the month. The Gasfield produces no oil. Net LGO production in barrels of oil equivalent totaled 1,471.
- Monthly production was 71% higher due to joint venture decision to increase the production choke setting to maximise field recovery.
- The joint venture has also agreed to commence drilling of the next Penészlek development well, Pen-105, at end July which is targeting the Pen-12 discovery with mean contingent gas resources of 1.46 bcf.
- The development and production schedule of ZalaGasCo Kft (14.74% LGO) in western Hungary will be announced in due course, to include new acreage in south west Hungary from MOL as announced by Ascent Resources plc (AST) on July 6.
- LGO retains 10% in Area 4 Blocks 4, 5, 6 and 7 of Southern Offshore Malta with Mediterranean Oil & Gas ("MOG") retaining the balance. The Area is governed by a Production Sharing Contract with the Maltese Ministry of Natural Resources.
- The joint venture is currently executing work program commitments to undertake various geoscience studies and data acquisition surveys to finalise the drilling targets for development of the acreage in 2010 and 2011.
David Lenigas, Executive Chairman, commented, "As forecast June reported increased production from Hungary with the Company production schedule continuing steady with 35% of production offline due to major development in Spain and production restrictions in US Gulf of Mexico and Trinidad."
"In Spain, the last stage of the first phase stimulation program was completed in mid July to deliver major well productivity improvements in existing production zones and through re-opening blocked perforation zones. Once all individual well production systems are optimized during July and early August, we anticipate Spain gross production to be near 600 bopd. This rate excludes the Hontomin extended well test which is due to commence at end August."
"In Hungary the Penészlek Development Area exceeded the production schedule by almost 40% with the decision to modify the production management settings to maximize field recovery. We also look forward to increasing activity on ZalaGasCo with the recent asset addition in south west Hungary from MOL."
"In Trinidad, production was reduced due to planned intervention. However we are encouraged by provisional agreements with the Ministry of Energy to expand activity in Trinidad in order to substantially increase production."
"The Company expects the July production schedule to be a step change higher than June as the Spain production system is optimized subsequent to completion of the stimulation program. By the end of Q3 2009, 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."
- Leni Sees Goudron Well Flow at 700 Barrels per Day (Sep 17)
- Leni Drills 5th Well in Trinidad Development Campaign (Aug 21)
- Leni Appoints New Finance Director (Aug 07)