PPC.L Regulatory News (PPC)

4 Jan 2008 07:00

Meridian Petroleum PLC04 January 2008 4 January 2008 MERIDIAN PETROLEUM PLC ("Meridian" or the "Company") Orion 36 Production Update Meridian Petroleum (AIM: MRP) announces an update on its Orion 36 well inMichigan, USA, in which it has a 75% Net Revenue Interest (NRI). Key Points •Allowable production permit for 4mmcfd granted by Michigan Regulatory Authority •Total gas production in 2007 of approx. 300mmcf, an average of 2.6mmcfd •Total Natural Gas Liquids (NGL) production in 2007 of approx. 4250bbls •Strong performance in December with a new peak flow rate of 3.98mmcfd •Current production level of over 3.7mmcfd as we enter the New Year •First Sulfatreat change-out completed in November The Michigan Public Service Commission (MPSC), the regulatory authority forMichigan State's oil and gas producers, has granted an initial allowable permitfor an average production level of 4mmcfd for the Orion 36 well. This permit isfor a period of 4 months from end December 2007. Production levels in December were good, reaching a peak of 3.98mmcfd inmid-month. Since mid-December the Company has been assessing reservoirperformance whilst sustaining a minimum wellhead pressure of 800psi. The resultshave been excellent with average flow rates of around 3.5mmcfd during the secondhalf of the month and a current rate of over 3.7mmcfd. Total production from Orion 36 in 2007 was just less than 300 million cubic feetof gas, at an average of 2.6mmcfd, and some 4250bbls of NGL. During November, the initial change-out of the Sulfatreat material wascompleted. A small number of odour complaints caused by the process were dealtwith by the operator, Wellmaster, and as a precautionary measure, production washeld back whilst steps were taken to further minimise the risk of emissions,both during normal production and during Sulfatreat change-out. These stepsincluded the installation of a new flare system and a Sulfatreat cleansingprocess that can be implemented prior to the next change-out. As a result ofthis prudent, minimum risk approach, average gas production for November wasslightly lower than we anticipated at approximately 2mmcfd. The Company currently estimates that Sulfatreat changes are likely to berequired for each 200mmcf produced. The change-out process is costly andincreases the risk of odour emissions and consequent regulatory investigation.As a result, the Company is implementing further investment at Orion,specifically in polishing sponges, which we anticipate will extend the life ofthe Sulfatreat material, reducing both risks and operating costs. Average production levels for November and December (allowing for downtime) Gas Natural Gas LiquidsNovember 1.96mmcfd 41bbls/dayDecember 2.96mmcfd 47bbls/day With continued firm energy prices in the US, current daily gross revenue fromOrion 36 at the end of 2007 is in excess of $32,000. Stephen Gutteridge, Chairman of Meridian Petroleum, said: "The Orion 36 well continues to perform consistently well and we continue togain valuable information on reservoir and operational performance. Theallowable production level in our permit supports our view that the well ispotentially capable of producing at over 4mmcfd and reflects confidence inMeridian and our partners Wellmaster as producers of sour gas. We remain veryaware of our responsibility for safety and the environment and will continue toinvest in improvements to our operations. Since coming on-stream in August 2007the total gas production from Orion of 300 million cubic feet with a gross valueof well over $2 million is a significant achievement, and one that marks us outfrom most other small AIM-listed oil and gas companies." Ed Childers, the Company's Chief Operating Officer, who meets the criteria of aqualified person under the AIM guidance note for mining, oil and gas companies,has reviewed and approved the technical information contained in thisannouncement. - ends - For further information contact: Meridian Petroleum Plc Stephen Gutteridge, Chairman +44 (0) 20 7811 0140 Ambrian Partners Tim Goodman +44 (0) 20 7776 6400 Parkgreen Communications Simon Robinson Erica Nelson +44 (0) 20 7851 7480 This information is provided by RNS The company news service from the London Stock Exchange