HIGHLIGHTS
The sale of Sand Draw South was concluded today.
The funds from the sale will allow re-development of the Ash Creek oil field to be
expedited.
The workover of the Trusler #9 well is scheduled to commence this week.
The approval to inject produced water into Trusler #9 is expected to be granted by
the end of November.
The installation of production facilities is progressing well.
BACKGROUND INFORMATION
A background summary, Elk's field re-development plans for Ash Creek, the potential
oil volumes being targeted by this program, and forward plans were provided to the
ASX in the release dated 15thApril 2010. The re-development activities were last updated on the 21st October 2010; these releases and others associated with the re-entry of the Trusler #1 well and its extended production test (EPT) are also available on the Company's website.
PROGRESS
The sale of the Sand Draw South oil field was closed today with minor adjustments to be settled later this month.
Funds from the sale of Sand Draw South will allow the re-entry of Trusler #2 and #4 to be considered prior to the onset of the northern hemisphere winter and conditional only on the production performance of Trusler #1 and #8.
A rig has been contracted for the workover of Trusler #9. The approval to re-enter Trusler #9 is expected by Wednesday 3 November 2010 (US time) when the rig is scheduled to be mobilized to the Ash Creek field. The Underground Injection Control (UIC) permit to inject produced water back into the Shannon formation at Ash Creek is covered by a "grandfather" aquifer exemption thereby reducing the process and time for formal approval to re-inject.
Work on the production facilities and running of the flowlines to and from wells is progressing well and should see Trusler #1 and #8 on production within the next few weeks (weather permitting). Welding of the flowlines was completed last week and they will be buried and tied back to the wells and production facilities this week. Temporary power to the wells will be provided by a leased generator set.
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