PYR Energy Provides Operational Update
PYR Energy provides an operational update. At the Mallard project in Uinta County, Wyoming, the #1-30 Duck Federal well is currently flowing on a 11/64" choke, with recent production indicating 7.5 MMcf per day of gas with 90 barrels of associated condensate and 325 barrels of water at a flowing casing pressure (up 7" casing) of approximately 1175 psi, which is an improvement from production results in May. Within the past two weeks the well has undergone production logging and a bottom hole pressure survey. Results of the tests indicate that water production has decreased significantly in the well since initial production in mid-March. When the well was initially placed on production, the water production ranged from 1200 to 1500 barrels per day. Due to slugging of liquids up the casing, metering of actual water rates has been difficult. A new sonic water meter has been installed at the well head and is currently providing more accurate water rate measurements. Based on the recent production logging of the well, the majority of water production appears to be coming from a vertical fracture system near the base of the perforations, approximately 200 feet above the known gas/water contact in the field. Analysis of the recent logging and pressure survey is being used to design production tubing to be installed with the intent to stabilize and enhance flow rates. The Company owns a 28.75% working interest in the well and surrounding acreage. It is anticipated that PYR and the working interest partners will acquire approximately 23 square miles of 3D seismic data during the summer of 2006 in order to better delineate additional drilling opportunities in the area.
At the Tortuga project in Smith County, Texas, the Chisum #1 well has been completed in the lower Rodessa section and is currently flowing to sales. As reported earlier, the initial test rates were constrained by flow into a low pressure system and as a result the well was tied into a high pressure system on May 26th. Since May 27th the well has been progressively opened up and is currently producing, on a 14/64" choke, at 1.1 MMcf per day with 50 barrels of associated condensate production with a flowing tubing pressure of 1425 psi. It is anticipated that the well will continue to be opened up in the coming weeks and should exhibit corresponding increased production rates. Rodessa production, within 3 miles to the north and northeast of the Chisum location, has yielded cumulative production ranging up to 6.4 Bcfe per well. Additional drilling locations to fully exploit the Rodessa potential in the project area have been identified and it is expected that approximately 25 square miles of 3D seismic data will be acquired to better delineate the additional drilling opportunities. The Company owns a 28.57% working interest in the Chisum well and surrounding acreage.
At the Madison project in Jefferson County, Texas, the Maness Gas Unit #1 well is undergoing a work-over to replace production tubing damaged by corrosion and scaling. The work-over began in mid-May and continues as difficulties were encountered in removal of the existing production tubing. As a result the well has been shut-in for the past 25 days and it is anticipated that the well should be producing again within two weeks. At the time of shut-in for the work-over, the Maness GU#1 had cumulative production of 2.6 Bcfe and was averaging approximately 400 BO/day and 1.5 MMcf/day (3.9 MMcfe/day) of production. The Company has a 12.5% working interest in the Maness Gas Unit #1 well. The operator has informed the Company that the previously scheduled drilling of the Wall #1 PUD location will be delayed due to rig availability, and it is currently anticipated that the rig will arrive on location in late August or early September. PYR will participate in the drilling of the Wall #1 with a 19.2% working interest.
At the Nome Field in Jefferson County, Texas, the Sun Fee #1-ST well continues to produce at a steady average rate of 12.8 MMcfe/day (8.9 MMcf/day and 625 BO/day). At the end of May 2006 the well had cumulative production of approximately 9.9 Bcfe. While the Company remains in legal dispute with the operator over pooling and working interest issues, the Company continues to be paid based on a 5.19% working interest in all revenues generated from the Sun Fee #1-ST well.
In Evangeline Parish, Louisiana, the Fontenot # 1 exploration well was spud on May 12th and reached a total depth of 10,650 feet on June 6th. Based on log and core analysis, casing has been set to total depth and completion will be attempted in a number of Yegua/Cockfield zones. PYR is participating with a 15% working interest in the well and surrounding acreage. The Company and its partners currently control approximately 3000 acres of leasehold in the project.
At the Wilburton Field in Oklahoma, the Scharff #7-1 commenced drilling operations in the first week of June and is currently drilling ahead below 4000 feet measured depth toward a target depth of approximately 15,000 feet. The Scharff #6-1 was recently placed on sales, and due to completion and fracture stimulation problems is currently producing at a rate in excess of 9 MMcfe per day. The Scharff #5-1 well, drilled and completed in 2005, had initial production rates of up to 54 MMcfe per day, and is currently producing at an average rate in excess of 30 MMcfe per day. The Company owns a 2.42% working interest in the wells.
Commenting on the operational activities, Scott Singdahlsen, President and CEO, stated, "Overall, we are pleased with our continued production increases. We are encouraged that the Duck Federal well continues to stabilize with a marked decrease in water production with strong flowing pressure. Initial indications of the Rodessa potential at the Tortuga project are very encouraging and we look forward to further development. Continued drilling in Oklahoma, the Texas Panhandle, at our Tortuga project, and anticipated drilling of our Ryckman Creek redevelopment project in Wyoming should allow for ongoing increases in reserves, production, and cash flow into the future. The shortage of available drilling rigs in the Gulf Coast, being experienced by all oil and gas companies, continues to impact our drilling program in the area. In addition, many of our projects are operated by others, and as such, we are dependent on them for the scheduling of operations and the receipt of information. We, like many of our stockholders, are frustrated by the apparent slow pace of activity and results. PYR continues to pursue growth through the drill bit, is reviewing selected strategic acquisitions, and increasingly will focus its efforts on projects where it has operational and technical control. For the month of April, 2006, the latest time frame in which we have complete data, PYR's net production averaged 4.1 MMcf per day.
Denver based PYR Energy is an independent oil and gas company primarily
engaged in the exploration for and the development and production of natural
gas and crude oil. At the current time, PYR's activities are focused in
select areas of the Rocky Mountain region, East Texas, and the Gulf Coast.
- Samson Completes Successful Tender Offer for PYR Shares (May 25)
- Samson Ups Price in PYR Tender Offer (Apr 25)
- PYR, Samson Move Closer Toward Merger (Apr 11)