Norse Energy Notes First Quarter Production
Norse Energy announced production volumes for its US and Brazilian subsidiaries in 1Q 2010.
Natural gas production from the US gas wells (before royalty) is estimated to average 7,555 Mcf/day (1,346 boe/day) in the first quarter. This represents an increase of approximately 16% over the fourth quarter 2009 production level of 6,524 Mcf/day (1,162 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 Q1-10 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%.
After achieving a peak rate of over 12,000 Mcf/day (2,137 boe/day), water encountered in the Herkimer formation highlighted the risk that continues to exist in this business. After successfully arresting the water induced decline, production has now recovered to approximately 7,800 Mcf/day (1,389 boe/day). The Company is still awaiting one state road permit to complete the previously announced pipeline extension to the south, which will add production from multiple wells.
Natural gas production from the Manati field (Norse Energy do Brasil 10% working interest) averaged 5.86 MMm3/day (3,688 boe/day net to Norse) in the first quarter 2010. This represents an increase of approximately 1% compared to the fourth 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.
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