OilVoice - New Standard Energy Discovers Gas in United States

New Standard Energy Discovers Gas in United States

Monday, February 22, 2010

- First US well in six well drilling program reveals 14ft gas column
- Gas sales from the Brasher #1 well expected in 30-45 days, weather and surface conditions permitting
- Drilling campaign focus now shifts to larger, deeper Wilcox prospects as part of initial six well drilling program planned for the US in 2010
- 3D seismic interpretation has identified 70+ targets to date in the Colorado County Project, providing ongoing prospect inventory

Drilling of New Standard Energy's first exploration well in the United States has successfully identified commercial quantities of gas.

The Brasher #1 well (32.5% New Standard working interest), in New Standard's Colorado County Project, onshore Texas, USA, was drilled to the planned total depth of 5000 feet. It was logged and 14ft of gas was encountered in the primary objective, a Yegua reservoir.

A formation test yielded 100% gas however the final size of the discovery will not be determined until the well has been flow tested for an extended period. Three additional deeper but thinner zones in the Yegua reservoir were also identified by logs and will be flow tested.

As a result of the gas discovery, production casing has now been set to total depth.

New Standard Managing Director Sam Willis said production facilities would now be installed and the well hooked up to a nearby gas pipeline to commence sales.

Gas sales are expected to commence in 30 to 45 days depending on weather and surface conditions, he said.

'New Standard's rationale for targeting US exploration was that low cost drilling of substantial targets identified by new 3D seismic could be conducted with high success rates and provide a quick and low cost pathway to production and cash flow,' Mr Willis said.

'The success at Brasher #1 provides early substantiation of New Standard's US exploration strategy.'

Brasher #1 is the first of six wells New Standard Energy plans to drill in the US in 2010.

The immediate of the joint venture's program now shifts to drilling larger Wilcox reservoir targets - which includes one very large prospect with the potential for 100 bcf of gas and 2.4 million barrels of oil (New Standard has a 36% WI in that prospect). Later this year, a large Edwards/Sligo target will also be drilled.

Mr Willis said the exploration success at Brasher #1 provided a solid start for the drilling program and was indicative of the quality of its US operator and partner (AKG) and the 3D seismic acquired by the Colorado County Project partners (AKG, New Standard and Burleson Energy) to identify and determine attractive targets for the 6-well drilling campaign.

A rig contract has been secured for the upcoming Wilcox wells and paves the way for the drilling of three 'back to back' wells targeting significant Wilcox targets to begin in March. Success on any one of these initial Wilcox prospects will provide a substantial benefit for New Standard shareholders and build on the initial cashflow that is expected from the Brasher #1 success.

'New Standard expects that the success of Brasher #1 is just the beginning of a successful US exploration and drilling campaign, and the next few months will be a very exciting time for New Standard shareholders' Mr Willis said.