Entek updated on its Gulf of Mexico drilling and joint ventures.
This activity at GA A133 and PN 975 signals the commencement of drilling in the 2010 season in the shallow waters of the Outer Continental Shelf of the Gulf of Mexico which the Company anticipates will result in additional reserves and contribute further solid earnings to Entek's existing revenue stream from High Island 24L Block in Texas State waters.
Entek has finalized a farm-out of 50% Working Interest in GA A133 to Peregrine Oil and Gas. As planned Peregrine will become operator of the Block. Peregrine is an experienced Gulf of Mexico operator.
A Processing and Handling Agreement with the adjacent GA A155 Block and platform owners has also been executed. This allows Entek to process production from GA A133 through the GA A155 platform.
The hydrocarbon resource potential of GA A133 ranges from 2 BCF of 3P reserves (certified by Ryder Scott) up to 18 BCF of prospective resource. The initial well in GA A133 will target a prospect with up to 12 BCF of prospective resource. The proven reserves and associated prospective resource on the Block will be targeted for tie-in later.
The well is scheduled to be drilled in early June 2010 with Entek's share of costs for the initial well estimated at A$1,270,000.
Entek has also farmed in for a 25% Working Interest in a well being drilled from the PN 975 platform. Peregrine is the operator of the Block and platform. A Processing and Handling Agreement with the PN 975 platform owners has also been executed by the Company. This allows Entek to produce its gas through the PN 975 platform.
The well is targeting 4 BCF up-dip of wells that prove the accumulation. There is an additional 2 BCF of upside that can be produced later upon success.
The well is scheduled for mid April 2010 and should take around 30 days to drill and complete with Entek's share of costs for the initial well estimated at A$1,003,000. Expected early revenue net to Entek of a successful well on PN 975 is US$100,000 per month. First production is expected by end June 2010.
The Gulf of Mexico activity precedes the recommencement of testing and drilling activity scheduled for the northern summer season in the Green River Basin, onshore Colorado and Wyoming in the USA. The Green River Basin program is currently being discussed with Entek's joint venture partner and details of this will be released as soon as decisions by the joint venture are finalized.
Together, the Gulf of Mexico drilling program and the Green River Basin activity combine to provide a full program for the remainder of 2010. Both programs are expected to result in significant reserves and revenue upgrades for the Company.
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