Operations Update

RNS Number : 3836T

Silvermere Energy PLC

06 December 2011

 



6 December 2011

Silvermere Energy PLC

("Silvermere" or "the Company")

Operations Update

Silvermere, 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 on schedule for production to commence at the end of 2011.

The operator, Dominion Production Company LLC (the "Operator"), has reported to the Company that platform construction is in its final stages with load-out operations about to get underway in Galveston. Load-out is scheduled to be completed by the 13th December.

Once load-out is completed, the loaded work barges will be mobilised to the designated platform location and made ready for installation. The installation programme is expected to take 14 days and will be completed by the tie-in of the well to the pipeline.

The Operator has also reported that the work to lay the 1,250 feet of 6-inch pipeline required to connect from the main 20-inch trunk line to the designated platform location is now scheduled to start on 15th December. Whilst this is slightly later than previously advised it is not expected to delay the start of production as this runs in parallel with installation.

Weather and sea conditions in the area are unpredictable at this time of year. After load-out the Operator will co-ordinate the best departure date for the barges with contractors in order to minimize any exposure to delays due to adverse weather. Weather delays, if encountered, could extend the above installation time frame to some extent. Further updates will be provided as appropriate.

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

"We are excited about the progress of the project and the approach of production, and we are working closely with the Operator to minimize any delays. Assuming reasonable co-operation from the weather, our objective of production before the end of the year is achievable."

-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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