Perth, Aug 1, 2008 AEST (ABN Newswire) - Exoma Energy Limited (ASX:EXE)(Exoma) is pleased to present its June 2008 Quarterly Report.
HIGHLIGHTS
During the Quarter:
- Net cash revenue from production for the Quarter was $0.472 million being an 82% increase over the cash revenue for the preceding Quarter
- Net share of production has risen for the Quarter to 9,070 Boe an increase of 28% over the preceding Quarter's production result
- Net Operating Cash Flows excluding exploration and evaluation for the Quarter declined by 83% to a net outflow of A$0.039 million against the prior Quarter
- The Kelln 94-2 well was successfully completed and commenced production during the period.
- Drilling commenced on the Company's first horizontal well in the Anadarko Basin through a fully carried interest with Crusader nergy as operators of the Brearley 1H-11 well
- Additional acreage within the highly productive and prospective Anadarko Basin which adjoins existing, producing acreage was acquired through a Joint Participation Agreement
- Drilling of two East Texas exploration wells was completed.
EXOMA'S DEVELOPMENT AND EXPLORATION INTERESTS
Anadarko Basin
Exoma and its field service contractor have completed the actions to increase production on two wells; arising from the operational review conducted in the first Quarter of 2008. Work on the third well operated by Exoma has been delayed pending the results and completion of the Brearley 1H-11 well, as savings from economies of scale could be made by undertaking these projects simultaneously.
Production from EB King 2-10 and Roy Deal 4-2 has stabilized following the work completed during the Quarter. To increase production a plunger lift system was installed to EB King 2-10 to restrict the volume of water being lifted to the surface with production. In the Roy Deal 4-2 well, a thin section of coil tubing was installed to increase the gas flow and reduce the volume of water produced. The combined production from these wells for the Quarter was 2,027 Boe, representing a 10% increase over the previous Quarter's production.
Roy Deal 3-11 performance improvement has been deferred pending a final decision on the Brearley completion plan. Operational costs have been reduced as the pump-jack previously under lease was purchased for the equivalent of two month's rental payments. Production for the period was marginally lower at 428 Boe from 383 Boe previously.
Exoma received a full Quarter's production from Kelln 94-2, being Exoma's maiden well. The well's operator, Mewbourne Oil, reported the well commenced producing at 208 Boe gross per day. Mewbourne Oil are also the operator of the Kelln Trust 5-1 and the Kelln 94-1 wells. Kelln Trust 5-1 remaining Exoma's largest producing well. Combined net production from the Mewbourne wells was 6,661 Boe for the Quarter, representing a 37% increase over the previous Quarter.
Leasing Activities
At the end of the Quarter, the Company along an Alliance partner had jointly acquired an additional 468 acres within the highly productive and prospectiv Anadarko Basin adjoining existing producing assets. The following map illustrates the sections from where the Company has operations within the Anadarko Basin.
The Company has continued to lease parts of sections 9, 14, 15 and 16 in Oklahoma Township 19 North and 26 West.
The acquisition of additional acreage is ongoing and the Company anticipates in August to be able to announce the results of ths project. The current average lease rate payable per acre is now double the amount paid when the leases were last renewed; with prices being pushed higher by competitor activity due to the area's production potential.
Drilling Plans
Exoma's with its various partners through alliance agreements has previously announced the drilling programme for the balance - 2008 for the Anadarko Basin properties. This programme includes two further horizontal wells in the Anadarko Basin with two separate alliances and drilling at two searate formation intervals. This strategy will see the maximum possible production generated from Exoma's Anadarko Basin assets.
Exoma continues to discuss with other interested parties the possibility of additional farm-outs as part of the Company's ongoing strategy.
East Texas
During the Quarter Exoma drilled the Glory Road #1 and High Promise #1 wells. Both wells were part of a four well programme in which Exoma was the non-operator. Subsequent to the results for both wells, the leases have been surrendered and there will be no further costs associated with these properties. The Glory Road #2 well remains under technical review by the operator and subject to further consideration.
The Operator of the Goliath prospect to date has not been able to fully lease the project and has not announced a future drillig date for this prospect.
REVENUES & OPERATIONAL COSTS
Revenue
Net cash revenue from production for the Quarter was $0.472 million representing an 82% increase over the cash revenue for the preceding Quarter. Major contributions to the increase were; revenue from Exoma's first well, Kelln 94-2 which entered full production during the first week of April, and continued increased output for the properties acquired in December 2007.
The standard industry terms of payment for net operating revenue to joint venture partners is 60 days. The first cash net revenue from Kelln 94-2 well of $0.110 million, was received in June 2008. Another key contribution has come from the increase in commodity.
General & Administration costs
General & Administration (G&A) costs remained unchanged as previously reported start-up costs were offset by the costs of the Dallas Office being operational for the full second Quarter. The net result of the higher revenue and continued control over G&A costs was a Net Operating Cash outflow, excluding exploration and evaluation, for the Quarter of A$0.039 million. This represents an improvement with an 83% lower outflow against the previous Quarter. The Company is now operating at a cash neutral position before exploration and evaluation expenditure.
CORPORATE AND OTHER DEVELOPMENTS
Entitlement Option Issue
Exoma completed the planned Entitlement Option Issue (EOI) as foretold in the Initial Public Offering (IPO) prospectus. The EOI had been previously deferred by a month and repriced against the IPO prospectus forecast in light of current capital arket conditions. The EOI was oversubscribed and the final allocation of the initial shortfall was made after the end of the Quarter. These options were granted admission to the ASX as a listed security on the 13th of May.
Cash Position
Cash held at 30 June 2008 was A$1.454 million.
The Company remains free of long term debt.
Contact
Brendan Egan
Director
Office +61 8 9389 9400
Mobile +61 0414 912 901
Email began@exoma.net
For Media enquiries
Tony Dawe
Mobile+61 413 322 110
Email info@exoma.net
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