Operations Update

RNS Number : 8213R

Silvermere Energy PLC

10 November 2011

 



10 November 2011

Silvermere Energy PLC

("Silvermere" or "the Company")

Operations Update

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 confirm that preparations for production from the I-1 well on its Mustang Island asset located in Kleberg County, Texas waters in the Gulf of Mexico  are well advanced and remain in line with previous advice that production is scheduled to commence before the end of 2011.

The operator, Dominion Production Company LLC, has reported to the Company that platform construction is substantially completed. The remaining outstanding item is the line heater which is being manufactured locally by a contractor and is expected on site in Galveston on 17 November 2011. Final completion of the platform is therefore expected before the end of November 2011. This will be followed by load-out operations which involve the loading of the tripod, well-deck and pipeline risers onto work barges, ready for mobilisation to the designated platform location.

The operator has confirmed the delivery to the area of 1,250 feet of 6-inch pipeline which will be used to connect the main 20-inch trunk line to the designated platform location in preparation for tie-in. A hazard survey has been completed for the pipe-laying barge and the pipe-laying operation is scheduled for the first week of December. The 6-inch pipeline is designed with sufficient gas and condensate capacity to support production from future wells in addition to the I-1 well.

Once load-out is completed in Galveston, the loaded work barges will be mobilised to the designated platform location and made ready for installation. The installation programme will include lowering the tripod to the sea bed and securing it by driving pilings into the seabed, lowering the deck onto the tripod, attaching the pipeline risers and connecting the production equipment to the well-head. The programme is scheduled to take 17 days and will be completed by the tie-in of the well to the pipeline.

Weather delays, if encountered, could extend the above installation time frame to some extent but should not prevent production commencing on schedule before the end of the year. Further updates will be provided as appropriate.

Commenting on these developments, Andy Morrison, Chief Executive of Silvermere said:

"We are pleased that the development of these operations remains on schedule. Our sights are firmly set on achieving production before the end of this year. Once achieved, this will significantly de-risk Silvermere's proposition - a move into production so soon after coming to the market will help set firm foundations for future growth."

-ENDS-

For further information please contact: Silvermere Energy PLC Andy Morrison, Chief Executive	[phone]
Merchant Securities Limited (Nominated Adviser and Broker) Lindsay Mair/Virginia Bull Rivington Street Corporate Finance Limited Jon Levinson/Dru Edmonstone	+ 44(0)20 7628 2200  [phone]
Bishopgate Communications Nick Rome/Shabnam Bashir	[phone]

About Silvermere Energy PLC

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.

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 assembly, constructed for the purpose and then transported to the Six Pigs gas facility.

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.

Silvermere is quoted on the AIM Market of the London Stock Exchange plc (AIM: SLME) with its offices in London.

 

END

 

 

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