San Telmo reviews Gordondale, McLeod, Teepee Creek
2004-07-13 12:59 ET - News Release
An anonymous director reports
SAN TELMO ENERGY LTD. PRODUCTION AND EXPLORATION UPDATE
San Telmo Energy Ltd. has provided an update on current operations.
Update
Gordondale and McLeod
Production from San Telmo Energy Ltd.'s McLeod and Gordondale wells commenced in April and May, 2004, respectively with June, 2004, being the first full month of continuous production from both. For the months of April, May and June, San Telmo's share of production revenues was approximately $876,600 (April, $69,600; May, $377,000; June estimate, $430,000). San Telmo's net operating revenues after estimated royalties and operating costs were approximately $525,000 for the same period. Current net production from both wells is approximately 350 barrels of oil equivalent per day.
Operational review
Teepee Creek
San Telmo's second Teepee Creek well has been drilled to total depth and cased as an indicated gas well. Production testing and completion operations are scheduled for July, weather permitting. Pipelining operations to tie in the company's Teepee Creek gas pool will commence following testing. San Telmo has 100-per-cent working interest in the project.
Gordondale
San Telmo has applied for GPP (good production practice) status on its 14-22 well. The EUB has determined that insufficient data exist to grant GPP, however a special allowable has been granted which will allow San Telmo to produce at 190 barrels of oil a day with associated gas for the next six months. After the six-month period San Telmo will reapply for GPP.
In March, 2004, San Telmo purchased an additional section of land at Gordondale immediately adjacent to its initial discovery. Currently, San Telmo has 1,280 acres (512 hectares) on the Gordondale play. Several follow-up locations from its 14-22 discovery have been identified. Current plans provide for at least two wells to be drilled in the next drilling season. San Telmo has 73.6-per-cent working interest in current production and 100-per-cent working interest in the follow-up locations.
McLeod
Production at McLeod remains restricted to between 750 thousand cubic feet per day and one million cubic feet per day with associated condensate. Negotiations have been completed with the gathering system owner to upgrade compression in the area. San Telmo has been informed by the owner that a new compressor will be installed in parallel which will provide 1.75 million cubic feet per day to 2.6 million cubic feet per day in extra capacity. Currently, the project is in the design phase, with construction and installation expected to take two to three months. When installed, future production levels for McLeod are expected to increase to 2.5 million cubic feet per day to 3.5 million cubic feet per day with associated condensate. San Telmo has a 70-per-cent working interest in the well.
WARNING: The company relies upon litigation protection for " forward-looking" statements.
