Last checked at 4 Dec 2012 11:09
AIM: SLME
04 December 2012
Silvermere Energy plc
("Silvermere" or the "Company")
Operations Update
Silvermere Energy plc, the independent oil and gas company with assets in the Gulf of Mexico, provides an update on the sales of oil and gas from its Mustang Island 818-L Field following the announcement dated 3 December 2012. This is based on information provided by the Operator, Dominion Production Company LLC ("Dominion").
As anticipated the I-1 well was turned back on to flow production through the sales meters yesterday morning.
At 10.45 am CST Dominion was then advised that the main interconnect pipeline operated by Exxon Mobil was being immediately shut down for up to two weeks for urgent repairs.
Andy Morrison, Chief Executive of Silvermere, commented:
This break in production is unfortunately outside of our control. It does not reduce the value of our asset or its income stream. There are many wells from various operators that flow into the pipeline and they, like our I-1 well, will all be shut down during this period. We hope to advise shortly when production has recommenced.
"This unexpected event also highlights the need, in line with the Board's stated strategy, for Silvermere to diversify its asset portfolio through investment in other oil & gas properties that are at or near cash flow in order to manage risk and minimise the effects of such delays in respect of any single asset."
--ENDS--
For further information please contact:
Silvermere Energy plc Andy Morrison, Chief Executive
|
+44 (0)7980 878 561 |
Merchant Securities Limited (Nominated Adviser and Broker) Lindsay Mair/Virginia Bull/Catherine Miles
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+ 44(0)20 7628 2200 |
Peterhouse Corporate Finance Limited Jon Levinson
| +44 (0)20 7469 0937 |
Bishopsgate Communications Nick Rome/Anna Michniewicz/Ivana Petkova | +44(0)20 7562 3350 |
About Silvermere Energy PLC
The Company has a 33.33 per cent working interest and 20.00 per cent net entitlement interest in the Mustang Licence Area, an area within the southern half of the north-west quarter and northern half of the south-west quarter of the Block 818-L field as defined in State of Texas Oil and Gas Lease numbers 108873 and 108874. The Mustang Island 818-L field (the "Field"), located in Kleberg County waters of the Gulf of Mexico, is home to a field re-habilitation project targeting bypassed or only partially produced gas-condensate.
According to a recent update to the independent Competent Persons Report published at admission in August 2011, the Mustang asset - which is operated by Dominion Production Company, the Field has a NPV10 of Proven and Probable reserves (P1 + P2) estimated to be US$14 million attributable to the Company's interest. It has an additional NPV10 of $57million net from the potential upgrade of Possible (3P) reserves. These reserves are based on a projected three well programme.
Initially, Silvermere is focussed on progressing production from the I-1 re-entry well where it has a 16.66 per cent working interest with a view to underpinning its long-term objective of creating a bankable and cash generative oil and gas company during the medium term and then drilling the three new wells to access the NPV identified in the CPR.
The Company maintains an active business development programme which aims to identify and acquire additional valuable assets either in or near production. These will be used to expand the business and provide additional value to shareholders over time. The Company's search is focussed on the US for the time being, both on-shore and off-shore, but may be expanded further afield in future.
Silvermere is quoted on the AIM Market of the London Stock Exchange plc (AIM: SLME) with its offices in London.