MaNzano
Manzano Shallow (St TRACT 991 #1) BNP Turnkey Operator, GGP WI Prospect 35%
The Manzano Shallow well was spudded on 2 February 2008.
The Board of Golden Gate Petroleum is pleased to announce that the Manzano Shallow exploration well has successfully flowed gas and has been brought into immediate commercial production.
The well has been tied directly into the sales grid along with GGP’s other producing wells and it is presently producing at a rate of 3.1 million cubic feet per day of gas as well as some condensate from a perforated 6 ft interval. Water production of around 190 bbls per day is believed to be from a deeper zone and due to a fault in the casing cement. Once the rig is finished with drilling the development well the current producing well will be cement squeezed and reperforated to cure the water production. In the mean time the JV will continue to produce and sell gas from the well and dispose of the water.
Seismic interpretation and correlation with other wells in the area suggest that this reservoir may be part of a single large accumulation covering an area of more than 1,000 acres. This interpretation will be tested by the drilling of a development well which has commenced and is using the same drilling rig and thereby making significant savings on the cost of mobilizing and setting up equipment. GGP’s net share of the estimated drilling cost for the development well is $US845,000. The current depth of the development well is 330 ft.
The addition of Manzano Shallow brings the number of Golden Gate’s currently producing wells to nine, increasing Golden Gates share of production to an estimated 5 mmcfd which at today’s gas prices equates to revenue of over A$900,000 per month net after royalty, taxes and operating costs. Gas production has very low operating costs so this revenue is very profitable.
This announcement contains forward looking statements that are subject to risk factors associated with oil and gas businesses. It is believed that the expectations reflected in these statements are reasonable but they may be affected by a variety of variables and changes in underlying assumptions which could cause actual results or trends to differ materially, including but not limited to: price fluctuations, actual demand, currency fluctuations, drilling and production results, reserve estimates, loss of market, industry competition, environmental risks, physical risks, legislative, fiscal and regulatory developments, economic and financial market conditions in various countries and regions, political risks, project delay or advancement, approvals and cost estimates.