PPC.L Regulatory News (PPC)

26 May 2006 07:01

Meridian Petroleum PLC26 May 2006 26 May 2006 MERIDIAN PETROLEUM PLC ("Meridian" or "the Company") COAL BED METHANE PROSPECT COMMERCIALLY VIABLE ACCORDING TO INDEPENDENT REVIEW Meridian, the oil & gas exploration and production Company with key assets inthe USA and Australia, today issued the following update on its Coal Bed Methane("CBM") prospect in the Black Warrior Basin, Alabama, USA which has been thesubject of a due diligence review by Scott Pickford. The review indicates that the prospect area contains multiple coals with gascontent and seam thickness values consistent with a commercially viable coalbedmethane development. The area has been previously explored with a number of wells drilled but notdeveloped. This available primary well data and engineering data fromindependent sources have been evaluated as part of the Scott Pickford review. Independent estimates of well productivity were found to be reliable and robustalthough, in Scott Pickford's opinion, there is a significant probability thatthe coals are undersaturated. Based on these assumptions, the review projects30-year cumulative gas production in the range 388 to 604 mmscf per well withpeak gas rates of 50 to 80 mscf per well, per day. Meridian has begun a land leasing programme to establish a footprint from whichto conduct a pilot development project. The Company intends that an initialdata collection and testing programme will be included as part of the pilotproject which itself will be confined to a relatively small scale, on the orderof 5 to 10 wells, until uncertainty with respect to undersaturation of the coalsis resolved. The capital investment required is expected to be modest by suchpilot project standards. If as expected, the pilot project confirms the review's projections, Meridianwill proceed to lease a 50,000 acre land position on which the Company wouldexpect to drill in excess of 600 producing wells. Adequate infrastructureexists within the area to transport gas to market on a highly economic basis. Mr. Tony Mason, Chief Executive of Meridian, said: "The Scott Pickford evaluation confirms our view of the significant potential ofthis CBM prospect. We have a carefully developed plan in place for the leasingof a footprint for the pilot project which we are now implementing. Assumingthe successful outcome of the pilot project, we intend to begin the immediatecommercial development of the prospect which will involve leasing 50,000 acresof land on which we would expect to drill over 600 wells." 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) Bill Staple Richard Morrison Citigate Dewe Rogerson (020 7638 9571) Media enquiries: Martin Jackson / George Cazenove Analyst enquiries: Nina Soon This information is provided by RNS The company news service from the London Stock Exchange