• Substantial production increase following successful Q3 drilling program
• Highlight is new Loma Field well – Activa’s best well to date
• 2007 revenue guidance of USD 7 million still good despite dramatic fall in oil prices
• Activa well positioned to weather the storm in financial markets
Activa Resources AG reports a substantial increase in its production of oil and gas following a successful drilling program in the third quarter of 2008. Daily production rates have almost doubled to over 400 BOED.
The primary contributor to the production increase is the new Sunny Ernst No. 2 well in the Loma Field in Galveston County, Texas, in which Activa has a 14.5 % working interest. The well, drilled and operated by a subsidiary of El Paso Corporation, identified 2 highly productive zones (Upper Andrau and S-Sand) and is now producing from the Upper Andrau, the smaller of the 2 zones. The well has been producing natural gas and oil since September and has recently been producing at approx. 6 MMCFD and 300 BO for a total of 1,300 BOED. The main interval (S-Sand) is expected to produce at even higher rates. Reserve estimates for the well range from 10 to 16 BCF and 500,000 to 1 million BO. The market value of the reserves attributable to Activa’s interest ranges from USD 10 -16 million. This drilling result exceeds Activa’s expectations significantly and the well is Activa’s best well to date.
At the 9 month stage Activa’s revenues reached USD 5.3 million, an increase of 90 % y-o-y. As a result of the new production Activa is confident of reaching its original 2008 revenue guidance of approx. USD 7 million despite the dramatic fall in oil prices, but assuming at the same time that oil and gas prices remain at their current levels.
Looking forward Activa expects to add production from additional new wells over the coming months, including the new OSR well which will soon be put on production and the 5th Hidalgo Frio well (SWGU No. 39) which will be spudded in the next 10 days.
Activa Resources CEO Leigh A. Hooper: “Production and reserve growth are the primary prerequisites for all successful junior E+P companies. Activa continues to deliver on these criteria as best illustrated by the new Loma Field well.”
Activa’s management expects the economic and pricing environment to remain difficult and will continue to focus on developing its lower-risk and producing properties in the US going into 2009. Activa is also working hard to position Rhein Petroleum GmbH in the German oil and gas arena. Hooper continues: “Activa is well placed to weather the current financial and economic crisis thanks to rising production levels and its low production costs of approx. USD 20 per BOE.”