Brisbane, Oct 30, 2008 AEST (ABN Newswire) - Texon Petroleum Limited (ASX:TXN) advises that the first well on its Leighton prospect - Peeler #1 has tested oil and gas at an unstablized rate of approximately 400 barrels of oil equivalent per day (boepd) comprising some 250bopd and 900 mcf of gas per day and 90 barrels per day of water through a quarter inch choke at a flowing pressure at the surface of about 1,500psi.
The amount of water being recovered has been steadily dropping throughout the test. The water is from the fracture stimulation procedure that was applied to enhance production from the oil and gas reservoir.
Early analysis of the oil indicates that it is a light oil. The gas has a heating value of about 1,350btu/cubic foot, which will achieve a premium sales price, possibly one third above the benchmark Texas gas price.
The well is already connected to oil tanks and is expected to be connected for gas sales in the next 7-10 days, at which time stabilized flow rate information will be able to be obtained.
On the basis of these results, it is planned to drill a second well and possibly further wells on the Leighton prospect as soon as possible. In regard to the second Leighton well, Global Petroleum Ltd and Excellong, Inc. have the option to participate in the well on the same terms as Leighton (Peeler #1). Texon's 70% WI share of the dry hole cost will be substantially covered through this arrangement if Global and Excellong participate in the second well although Texon will fund its 70% WI share of the cost of testing and completing the well for production.
The 3D seismic anomaly representing the oil reservoir in the Leighton prospect covers an area of some 600 acres and if the second well is also successful, further drilling will be required to develop the field.
David Mason, Texon's CEO said "the Leighton discovery represents Texon's first success in its deep drilling program. This is a very pleasing result and will lead to a step change in Texon's revenue stream".
Texon has a 70% WI (52.5% NRI) in Leighton.
The Leighton (Peeler #1) Joint Venture comprises Texon Petroleum Ltd 70% WI (Operator), Global Petroleum Ltd 15% WI and Excellong, Inc 15% WI.
For information on Texon's farmout of this project and costs and potential, please refer to our releases of 15 August, 12, 19 and 26 September and 2 October 2008.
Glossary:
bcf: billion cubic feet
boepd: barrels of oil equivalent per day
bopd: barrels of oil per day
btu: British thermal units
NRI: Net Revenue Interest
PSI: Pounds per square inch
WI: Working Interest
Contact
Dr John Armstrong
Chairman
Brisbane: +61-7-3211-1122
Or
Mr David Mason
Chief Executive Officer
Brisbane: +61-7-3211-1122
Houston: +1-281-419-4976
| ||
|
