Leni Gas & Oil plc (LGO) has provided a corporate update for the six week period commencing December 1, 2009, as well as a production update for December.
During December the Company's direct and indirect monthly production totaled 10,125 boe (average 338boepd).
Peak daily production for the month was 393 boepd. The full production capacity was restricted by 60% in both Spain and the Gulf of Mexico with planned development works, 20% in Trinidad by planned interventions, and shut-in production in Hungary.
The Spain production schedule continues to be restricted due to the 2009 rehabilitation well program flowing high pressure gas and increasing water production in some key producer wells for the first time in decades. The Company is working at resolving both fluid handling challenges so as oil production can be maximised ahead of the next capital programs.
The Company now owns 100% of all the Spanish exploration acreage after assignment from the minority partner.
The evaluation of reserves and resources is also including the assessment of potential resources below the Ayoluengo oilfield as regional geology indicates significant shale gas potential within the permits managed by the Company.
In the Gulf of Mexico, the agreement to convert the Company's investment in Byron Energy to direct working interests and options in the Gulf of Mexico and Gulf Coast acreage has been successfully completed.
Programs to increase Eugene Island production continue with new compression completed and work planned to perforate undepleted zones.
Agreements for the assignment of Trinidad interests to a new subsidiary are near completion which shall enable more control and influence on production expansion.
Joint venture reviews of all countries of operation shall take place during January 2010 and shall be reported in the next corporate update.
David Lenigas, Executive Chairman, commented, "In Spain our works to upgrade the facilities and well completions continue to prepare for the 2010 production enhancement program. We are pleased with the assignment of the minority partner interests in the exploration acreage to the Company and are looking forward to completion of the new reserves and resources assessment which shall also include an estimate of deeper prospectivity across the acreage."
"In the Gulf of Mexico we are very pleased with the completion of the conversion agreement to retain a direct working interest in the portfolio and are looking forward to reporting the direct performance of Eugene Island and progress of the other developments at start 2010."
"In Trinidad we are near completion on the commercial agreements to considerably increase our activities levels in country to commence production expansion works, and we look forward to reporting progress on Hungary next month with re-commencement of testing operations."
"Looking ahead, the Company expects the January production schedule to be higher than December, and shall report the program of activities for all countries after discussion with all partners in January."
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