Operations Update

RNS Number : 0308Q

Silvermere Energy PLC

01 November 2012

 



AIM: SLME

1 November 2012

Silvermere Energy plc

("Silvermere" or the "Company")

Operations Update

Silvermere Energy plc, the independent oil and gas company focused principally on appraisal and production opportunities in the US, is pleased to announce further progress on commencement of 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").

Further to the announcement made on 28 September 2012, the well was re-opened to flow on 2 October 2012 under supervised conditions. System pressure was gradually increased over the subsequent days and by 13 October 2012 the system was operating under continuous and unmanned conditions. A 24-hour flow-test was conducted on 15 October 2012 during which time production was 155 bopd plus 700,000 scfpd of associated gas and zero water. These results have now been reported to the Texas state authorities and are expected to confirm the designation of the well as an oil well.

Following the completion of the 24-hour flow-test the well was shut in at the request of the pipeline operator to enable them to attend to a further repair on the pipeline riser at one of the neighbouring abandoned platforms. This repair was completed on 30 October 2012 and the well is now returning to continuous operation.

Commenting on these developments, Andy Morrison, Chief Executive of Silvermere said: "We are encouraged by the production levels achieved during the flow-test, especially the mix of oil and gas. The well is still in a clean-up phase and while reservoir pressures are encouraging, it is still too early to make firm predictions of the commercial flow rates that will ultimately be achieved."

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.

Further updates will be provided as the work progresses.

--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/Catherine Miles	+ 44(0)20 7628 2200
Peterhouse Corporate Finance Limited Jon Levinson	[phone]
Bishopsgate Communications Nick Rome/Anna Michniewicz/Ivana Petkova	[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-1 Well 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

 

 

MSCLLFFDIALLVIF