PPC.L Regulatory News (PPC)

19 Jul 2006 07:00

Meridian Petroleum PLC19 July 2006 19 July 2006 MERIDIAN PETROLEUM PLC ("Meridian" or "the Company") ACQUIRES RIGHTS TO EXPLOIT ESTIMATED 158 BCF GAS RECOVERABLE Meridian Petroleum (AIM: MRP), the oil & gas company with key assets in the USAand Australia, today announces that it has negotiated the rights to exploit thedeep gas potential of the Cotton Valley Formation in the Calvin Field, WinnParish, Louisiana, U.S.A, by way of a 70% Net Revenue Interest. The Calvin Field is a dome-like structure with a prominent, possibly sealing,NW-SE fault which bisects the field. Meridian already holds rights to therelatively shallow Sligo-Pettet and Rodessa formations south of the fault. The deep rights contain 4 distinct potential reservoir members: • Knowles (or Winn) Limestone • Terryville A&B sandstones (Main Targets - normal pressure) • Calvin A&B sandstones (Main Targets - overpressured) • Troy Limestone Scott Pickford, at the request of Meridian, has undertaken a review of theavailable data to assess the gas potential of the Cotton Valley Formation.Scott Pickford has concluded that there is substantial gas-in-place. The Terryville A and B sandstones are normally-pressured but relatively tightreservoirs. The Terryville B sandstone has flowed gas at variable rates duringthe late 70's using conventional completion techniques whilst the Terryville Asandstone has yet to be tested but looks to be similar based on log characterand cores. The Terryville A and B sandstones are considered to be contingent onthe successful application of modern completion techniques such as 'slick-waterfraccing' which may significantly enhance Meridian's ability to successfullydevelop these reservoirs. The over-pressured Calvin sandstones have tested at significant rates in thepast with very high pressures and high flow rates for the area. Scott Pickfordconsiders that there is a need for high-pressure rated facilities andappropriate safety systems to control the prevailing well-head conditions alongwith pressure reduction facilities to get the gas online. It should be notedthat both Anadarko and Rising Star are producing from similar formations in theVernon Field, to the north of the Calvin Field. Scott Pickford considers the high pressure volumes to be contingent on aneconomically viable development plan which takes into account the requirementfor specialist facilities. Meridian will be progressing such a plan after thenormally pressured reservoirs have been tested, converted to Reserves andbrought onto production. Scott Pickford's unrisked estimate of gas in-place and recoverable ContingentResource is tabulated below. Reservoir In-place (Bcf) Recovery Factor Estimated (%) Recoverable (Bcf)Normal PressureTerryville A 61.78 55.0% 33.98Terryville B 117.50 60.0% 70.50OverpressuredCalvin A 40.76 75.0% 30.57Calvin B 32.61 70.0% 22.83Total 252.65 157.88 Anthony Mason, Chief Executive of Meridian said: "The previously discovered and tested Calvin deep reservoirs contain significantestimated recoverable gas resource though they have remained undeveloped due totechnical difficulties. We will apply modern recovery techniques to overcomethese difficulties enabling us to bring significant quantities of gas to marketunder controlled conditions. "Meridian currently has production from the Victory 21 well while the Calvin 36# 1 is ready to commence production immediately upon the granting of a statepermit, which is anticipated shortly." Mr. Andrew J. Kirchin, Managing Director of Scott Pickford, who meets thecriteria of a qualified person under the AIM rule guidance for mining, oil andgas companies, has reviewed and approved the technical information containedwithin this announcement. Enquiries: Meridian Petroleum (020 7409 5041)Tony Mason, Chief Executive Westhouse Securities (020 7601 6100)Richard Morrison Citigate Dewe Rogerson (020 7638 9571)Media enquiries: Martin Jackson / George CazenoveAnalyst enquiries: Nina Soon This information is provided by RNS The company news service from the London Stock Exchange