Operations Update

RNS Number : 6294C

Silvermere Energy PLC

03 May 2012

 



3 May 2012

Silvermere Energy plc

("Silvermere" or the "Company")

Operations Update

Silvermere, the independent oil and gas company focusing principally on appraisal and production opportunities in the US, provides the following update on preparations for production from the I-1 well in its Mustang Island 818-L Field. This is based on information provided by the Operator, Dominion Production Company LLC ("Dominion").

Following some weather-related delays to lifting operations, load out of the tripod and pilings onto the barge on location at Laredo's yard in Galveston was completed on 23 April 2012.

On 28 April 2012 while the lift-boat was en route to Galveston to take on supplies before heading on to Corpus Christi to commence the Mustang Island 818 pile-driving, it struck an unmarked and unreported obstruction which created a three foot hole in its hull.  The vessel took on large amounts of water and was completely without engine power as a result. The vessel was towed to Cameron, Louisiana for inspection and the incident, due to its nature, is now the subject of a coastguard investigation. No-one incurred any injuries as a result of the incident.

Based on the damage incurred it is believed by Laredo that the lift-boat will be out of commission for at least two months. 

Laredo, who are contracted by Dominion, are currently attempting to source an alternative lift-boat and an update on progress will be provided as soon as possible.

Andy Morrison, Chief Executive of Silvermere Energy PLC, said, "This delay to the preparation for production is unfortunate and frustrating, but it does not present additional liabilities to the Company. The lift-boat was not at the time of the incident on contract to Dominion."

--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	+ 44(0)20 7628 2200
Rivington Street Corporate Finance Limited Jon Levinson	[phone]
Bishopsgate 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.

 

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