President Petroleum announced an update on its operations.
Operations - Louisiana, USA
East Lake Verret
The Simmons 3 well (21.9% net revenue interest (NRI)), which was a minor gas producer has been re-completed as an oil producer, currently producing a gross 100 bbls/day. Gross daily revenue from this well has been increased from around US $500 to over US $8000.
East White Lake (21.875% NRI)
The A-41 side-track well was completed late last week and initial gross flow rates are significantly better than expected at 140 bbls/day of oil and over 400 mcfd of natural gas.
The work-over of the A-29 well was also successfully completed last week and the well was returned to production at a gross rate of 60 bbls/day of oil
Production from the A-52 well, brought on-stream in March, has settled at a gross 100 bbls/day and 80 mcfd of gas
Production has been increasing steadily in 2010 as a result of the development drilling program and in particular, the Company has successfully increased its exposure to the current strong oil price.
Net oil production in Q1 2010 was 60 bbls/day, a substantial increase on the 38 bbls/day in Q4 2009. With the contribution from the new wells, current April production has shown a further increase to 130 bbls/day of oil and around 300 boepd of hydrocarbons in total.
At East White Lake, in which the Company acquired a working interest in January, net daily hydrocarbon production has increased from 30 boepd in February to a current level of over 90 boepd.
Operations - South Australia
The initial well on PEL 82 will be named the Northumberland 2 well, located 3.2 km north-west of Port MacDonnell and will test the Flaxman and Waarre reservoirs. The combined target prospectivity for Northumberland 2 is 40 million barrels of oil or 54 bcf of natural gas, with a target depth of 3200 meters.
The Company has been engaged in negotiations with drilling contractors for potentially suitable rigs for the PEL 82 drilling program. The Company is anxious to avoid excessive mobilization costs, and has been seeking sharing arrangements with other operators in South Australia and Victoria. A satisfactory agreement in principle has now been reached with an Australian contractor who has a suitable rig currently outside Australia, and has already contracted to bring it into the country. Detailed discussions on the drilling contract and timetable are now underway.
The airborne gravity and magnetic survey on PEL 132 has been completed over 900 kms north-west of Lake Frome. Processing of the data will take two months.
Stephen Gutteridge, Chairman of President Petroleum, said, "Our recent drilling program in Louisiana has substantially increased production, particularly of oil, and cash-flow. Given the current strong oil price we will be looking to add further production from both fields wherever possible."
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