Sugarloaf Sees Production Soar

Empyrean provided the following update on operations at the Sugarloaf Project within the Sugarkane Gas & Condensate Field, Texas.

Rancho Grande Initial Production Rate

The Rancho Grande-1H well commenced flow back on June 1, 2010 and has been flowing on a reduced choke setting. The maximum production rate averaged over a consecutive 24 hour period has been:-

The intent of producing the well on a reduced choke setting is to investigate whether limited reservoir drawdown can improve decline rates and ultimate recovery from the wells. It should be understood that the well is capable of flowing at a higher rate, but this investigation is part of the ongoing efforts to optimize the commerciality of the field. In addition, the following comments should be considered: 

• This is an initial production rate that has been observed during clean up and as such is not yet indicative of a short or long term production profile.
• The well still has considerable fluid to recover from the fracture stimulation.
• The well is currently producing through the production casing. A production tubing string will be installed in due course.

A further announcement will be made as significant developments occur. 

Empyrean Director Tom Kelly said, "This is another strong production result from recently drilled and stimulated wells at Sugarloaf. These flow rates, along with the recently reported 30 day production rates from Easley and Morgan further demonstrate that that the knowledge gained to optimize the drilling and completion of these wells is now resulting in consistently strong production rates.