Irvine Energy plc, the AIM listed oil and gas exploration and production company, provides an update on its key projects in the USA. Good progress is being made across all three project areas – Kansas, Niobrara and Oklahoma. Currently, the Company has 40 wells producing across all its licence areas in Kansas and Oklahoma (including 18 wells at Niobrara).
In Oklahoma, the Company has completed its first vertical Woodford shale well, Farrow 1-24. This was fracture stimulated in May and first production started on 23 June - it is currently producing back frac water and gas. The well will continue to clean up for a couple of months until full production is reached. The Company has also completed drilling its first horizontal Woodford shale well, Jones 1-5H. Drilling went well and the well reached target depth on 29 June after which production casing was set. The multistage fracture stimulation will take several weeks and initial test rates should be available during the later part of Q3 2008. Assuming success, full scale production and gas sales are expected to commence thereafter. The Company has identified four drilling locations on its Hartshorne coal bed methane (‘CBM’) property. Subject to state regulatory approval, the Company expects to drill four to eight CBM wells by the end of 2008.
In Kansas, the Company expects wells Rock 1-5 and Rock 1-32 to be in production and selling oil in August – possibly earlier in the case of Rock 1-5. There are two additional prospects in Kansas that are expected to be drilled within this programme. Further wells are being planned for the second half of this year.
The Company’s production at Niobrara was temporarily interrupted in May / June due to operational issues relating to gas compression. A new compressor was installed at Niobrara on 23 May 2008 and since then the Company’s production has been intermittent due to pressure stabilisation and system balancing issues associated with the early dewatering phase of production. Accordingly, the Company’s current net working interest daily production across all projects is 420 MCFDE. The Company expects production at Niobrara to stabilise and increase by the end of August and its daily production to increase significantly in the second half of the year as the number of producing wells increases at all of its key project areas. The Company currently has 18 wells producing at Niobrara and expects to have an additional four wells (22 in total) in production by the end of August.
The Company has a $50 million mezzanine finance facility in place to fund its entire drilling programme for its existing projects. In addition, the Company is also planning to undertake a 3D seismic programme and some infill land acquisitions in the future. The Company will fund this separately from the current mezzanine facility.
Irvine Managing Director Aaron Close said, "We are very excited about our progress on Jones 1-5H and Farrow 1-24. These wells are part of our strategy to develop the shale gas and quickly grow the Company’s reserves."