Last checked at 5 Mar 2013 07:00
AIM: SLME
05 March 2013
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, is pleased to confirm further progress on production and sales of oil and gas during February 2013 from the I-1 well on its Mustang Island 818-L Field. This is based on information provided by the Operator, Dominion Production Company LLC ("Dominion").
Total production and sales of gas recorded during the month were 11,477,000 standard cubic feet (scf), an increase of 32% month to month and total production of oil was 1,845 barrels, an increase of 4% month to month (1,912,068 scf and 308 barrels, respectively, net to Silvermere). The well was flowing for 73% of the time in February, representing a significant improvement on the previous month.
Flow rates were restricted at times due to partial obstruction of the choke with drilling mud and debris as the well clean-up continued. When unrestricted by mud and debris, the well flowed at typical values of 700,000 scfpd and 155 bopd with a tubing head pressure of 2700 psi, in line with previous guidance.
Oil produced during January and February has not yet reached the shore installation and sales meters due to slow flow rates in the 20" line at the high pipeline operating pressure. The operator has advised that it intends to reduce pipeline operating pressure to increase flow velocities in the pipeline and thereby to deliver first oil sales.
Silvermere owns a 16.66% working interest in the I-1 well and a 33.33% working interest in future wells on the leases.
Commenting on these recent developments, Andy Morrison, Chief Executive of Silvermere, said: "We are pleased to note the improvements achieved during February 2013 which keep us on track to deliver flow rates in line with previous projections. The clean-up is continuing and we look forward to further progress with operations in March."
This statement has been approved by Mr Tom Gunningham CEng MEI, Director of Rockflow Resources Ltd, an independent oil and gas consultancy, who is a Chartered Petroleum Engineer with 24 years' experience in the Petroleum Industry, and who is a Qualified Person in accordance with the guidance note for Mining, Oil & Gas Companies issued by the London Stock Exchange in respect of AIM Companies.
--ENDS--
For further information please contact:
Silvermere Energy plc Andy Morrison, Chief Executive
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+44 (0)7980 878 561 |
Merchant Securities Limited (Nominated Adviser and Broker) Lindsay Mair/Scott Mathieson/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 US$57million net from the potential upgrade of Possible (3P) reserves. These reserves are based on a projected three well programme.
Initially, Silvermere is focused 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 focused 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.