Norse Energy Releases Production Volumes for US, Brazil
Norse Energy has announced production volumes for its US and Brazilian subsidiaries for the third quarter 2009.
US operations Natural gas production from the US gas wells (before royalty) is estimated to average 6,775 Mcf/day (1,207 boe/day) in the third quarter. This represents a decrease of approximately 15% over the second quarter production level of 8,014 Mcf/day (1,427 boe/day).The volume is based on daily meter readings at the company's Central New York compressor stations. Final production numbers, to be reported in the Q3-09 financial statements may deviate somewhat from this volume. Reported sales volumes in our financial statements will be adjusted for 12.5% royalty and fuel retainage, which has historically been averaging approximately 4%.
Production levels in the third quarter declined due to reduced drilling operations in the second quarter and the lack of production from several wells waiting to be turned into line. Overall efficiency is improving with average drilling days per location declining from the mid to low 20s at the start of the quarter to less than 15 days at the close. As Norse develops its anticipated 0.5 Tcf (90 MMBOE) Herkimer field, it continues to project reaching the 12,000 Mcf/day (2,137 boe/day) production target by year's end. The company's projection is due to this improved drilling efficiency and also the anticipated addition of wells presently shut-in or awaiting pipeline.
Brazilian operations Natural gas production from the Manati field (Norse Energy do Brasil 10% working interest) averaged 5.49 MMm3/day (3,451 boe/day net to Norse) in the third quarter 2009. This represents an increase of approximately 10% compared to the second quarter 2009. Reported sales volumes in our financial statements will be adjusted for retainage (usage, line loss and stripping of condensate) which has historically been approximately 6% below produced volumes.
Production was impacted by the maintenance of the FAFEN fertilizer plant early in the quarter, but increased to record levels towards the end of the quarter. On September 28th, production from the field reached an all-time record volume of 7.64 MMm3/day (4,804 boe/day net to Norse). Norse expects that the production will stabilize levels above 6 MMm3/day (3,774 boe/day net to Norse) for the remainder of the year and will increase further in 2010.
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