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6 Sep 2011 07:00
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6th September 2011
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Silvermere Energy plc
("Silvermere" or "the Company")
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Operations Update
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Silvermere Energy Plc ("Silvermere" or "the Company"), the independent oil and gas company focusing principally on exploration, appraisal and production opportunities in the US is pleased to provide an update on recent developments at the I-1 Well at its Mustang Asset located in Kleberg County, Texas waters in the Gulf of Mexico.
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The Company's Mustang Asset consists of a 16.66% working interest in the I-1 Well (with the Company bearing 33.33% of the costs up to completion of the well's tie-in) and a 33.33% working interest in the remainder of the Mustang Licence Area.
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Silvermere received confirmation yesterday from the operator, Dominion Production Company LLC ("Dominion") that a tripod platform fabrication, installation and tie-in contract with Laredo Construction Inc ("Laredo") has been entered into on behalf of the working interest partners. The total lump sum price under the contract with Laredo is US$2.9m of which Silvermere's share is one third, being $966,667 (approximately Β£590,000). Work on the fabrication of the tripod platform has now commenced with installation and production expected before the end of 2011.
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Commenting on these developments, Andy Morrison, Chief Executive of Silvermere said, "Since acquiring our interest in the Mustang Asset last month, we have made a good start in working directly with the operator, Dominion, to get the I-1 Well closer to production and we look forward to a successful partnership with them. We are currently on schedule and a number of improvements and upgrades have been added to the originally anticipated fabrication and tie-in project without any increase in anticipated project costs."
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Further updates will be provided as the project proceeds.
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-ENDS-
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For further information please contact: Β Silvermere Energy plc Andy Morrison, Chief Executive Β | Β Β Β +44 (0)7980 878561 Β |
Merchant Securities Limited (Nominated Adviser and Broker) Lindsay Mair/Virginia Bull Β Rivington Street Corporate Finance Limited Jon Levinson/Dru Edmonstone Β Old Park Lane Capital Luca Tenuta Β | Β + 44(0)20 7628 2200Β Β Β +44 (0)20 7562 3357 Β +44 (0)20 7493 8188 |
Bishopgate Communications Nick Rome/Shabnam Bashir | Β +44(0)20 7562 3350 |
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About Silvermere Energy Plc
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The Company acquired its interest in the Mustang Asset on 30 August 2011. This comprises a 33.33 per cent. working interest and 20.83 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, located in Kleberg County waters of the Gulf of Mexico, is a field re-habilitation project targeting bypassed or only partially produced gas-condensate.
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Early in 2011 the Hercules Offshore 205 jack-up rig was contracted to re-enter the I-1 Well on the Mustang Licence Area which was considered to be the most likely of the historic well sites to provide 14 optimum re-entry conditions. The I-1Well re-entry and side-tracking operation was completed in March 2011 leaving it ready to complete in sand horizons I-1 to I-6. Production and flow testing was carried out during June 2011. The well re-entry programme was led by Dominion as the operator. Gas and oil produced from the I-1Well is proposed to be connected to pipeline infrastructure and tied in via a subsea tree, constructed for the purpose and then transported to the Six Pigs gas facility.
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Silvermere's strategy is to acquire a portfolio of US oil and gas licence interests onshore and in shallow offshore waters, characterised by relatively low risk and low cost with the potential for near term production.
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Silvermere is quoted onΒ the AIM Market of the London Stock Exchange plc (AIM: SLME) with its offices in London.
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