Gas Pay Found at High Island Prospect

Maxim Resources is releasing the results from its exploration and drilling activity in its offshore oil and gas project located in the High Island area in the Gulf of Mexico. Maxim has earned a 10.075-per-cent net revenue interest in the High Island block, and the remaining interest is held by Probe Resources and a syndicate of investors. The operator for the project is Republic Petroleum LLC.

A sidetrack (sidetrack 2) of the B-1 wellbore (the original well) on the High Island block was drilled to a measured depth of approximately 14,950 feet to 16,931 feet (vertical depth of 16,901 feet), and encountered a minimum of 75 feet of gas pay in the Cris R-1 sand and the upper Cris R-1 sand. Well flow tests indicate that an absolute open flow of 52.3 million cubic feet of gas per day is estimated. In addition, well flow tests indicate that the well will flow at an estimated rate of 15 million cubic feet of gas per day on an 11/64th-inch choke with a drawdown pressure estimated at 939 pounds per square inch and a flowing tubing pressure of about 9,600 pounds per square inch. Bottom-hole pressure is estimated to be in excess of 13,546 pounds per square inch. Original bottom-hole pressure was estimated to be 15,565 pounds per square inch. The well was intentionally drilled to stop short an estimated 30 feet of penetrating the gas water contact so as to avoid potential mechanical complications associated with behind-pipe water communication. The well is expected to be placed on-line in late September or early October of this year following the completion of a new flow line.

The original well produced 8.5 billion cubic feet of gas from the Cris R sand at an average rate of 22 million cubic feet gas per day from October, 2003, to December, 2004.

Maxim and the syndicate are proceeding with seismic data acquisition on the High Island block along with adjacent blocks, and are investigating the economic feasibility of developing oil and gas reserves from within the High Island block.