Egdon Resources plc (AIM:EDR) is pleased to provide an update on production operations at the Keddington oil field located in Lincolnshire licence PEDL005(Remainder).
Egdon is the operator of the Keddington oil field with a 75% interest. Egdon’s joint venture partners are Terrain Energy Limited (15%) and Alba Resources Limited, a wholly-owned subsidiary of Nautical Petroleum plc (10%).
As previously reported, drilling operations on the Keddington-3 and 3z wells were successfully completed on 24 April 2010.
The Keddington-3z well was completed for pumped production on 4 June 2010 following delays caused by the need for a work-over to repair leaking production tubing. Continuous pumped production of the well began at 10.30 hours on 7 June 2010 and by 18.30 hours the well had begun to produce hydrocarbons to the surface.
As significant flowing pressure was observed, the pump was stopped and the well was allowed to flow naturally. The well has been free-flowing oil and gas to the surface since this time. Oil production for the seven days until 10.30 hours on 14 June 2010 was 1855 barrels at an average rate of 265 barrels of oil per day. The well is also producing significant quantities of gas with the daily rate being over 500,000 cubic feet of gas per day. The currently observed production represents over a ten fold increase in daily oil volume and a five fold increase in gas volume from the Keddington-2z donor well. It should also be noted that flow from the well is currently being restricted to manage the gas flows and pressures in the surface facilities. The flowing pressure at the well head has been steady at around 69 bar.
Given the significant levels of gas being produced from this well, Egdon is now looking to resurrect plans for on-site electricity generation with a view to developing an additional revenue stream and utilising the produced gas.
Commenting on the preliminary production data Mark Abbott, Managing Director of Egdon said;
“We are encouraged by the early performance of the Keddington-3z well. The current level of oil production exceeds our pre-drill estimate and will provide a welcome a boost to production and revenues. The high level of gas production presents us with an opportunity to generate further cashflow from the field in due course and as a priority we will be reviewing our options for electricity generation over the coming weeks. We will continue to produce and monitor the well to determine its long term production capacity and will update shareholders in due course.”