Production Delayed at Dominion's Mustang Field

Silvermere provided the following update on preparations for production from the I-1 well in its Mustang Island 818-L Field. This is based on information provided by the Operator, Dominion Production Company LLC ("Dominion").

Following some weather-related delays to lifting operations, load out of the tripod and pilings onto the barge on location at Laredo's yard in Galveston was completed on April 23, 2012.

On April 28, 2012 while the lift-boat was en route to Galveston to take on supplies before heading on to Corpus Christi to commence the Mustang Island 818 pile-driving, it struck an unmarked and unreported obstruction which created a three foot hole in its hull. The vessel took on large amounts of water and was completely without engine power as a result. The vessel was towed to Cameron, Louisiana for inspection and the incident, due to its nature, is now the subject of a coastguard investigation. No-one incurred any injuries as a result of the incident.

Based on the damage incurred it is believed by Laredo that the lift-boat will be out of commission for at least two months.

Laredo, who are contracted by Dominion, are currently attempting to source an alternative lift-boat and an update on progress will be provided as soon as possible.

"This delay to the preparation for production is unfortunate and frustrating, but it does not present additional liabilities to the Company. The lift-boat was not at the time of the incident on contract to Dominion," Chief Executive of Silvermere Energy PLC Andy Morrison said. 


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