Operations Update - Utah State Minerals #1 Gas Well Workover Operations Commence
Marion Energy Limited (ASX: MAE, MAEO, MAEOA) is pleased to announce that it has commenced the first stage of its operations at the Utah State Minerals #1 well at Clear Creek. Details of these operations are outlined below.
Utah State Minerals # 1 well (USM #1)
Workover operations on the USM #1 well have commenced. This well is one of the wells that were drilled during the initial development of the field and was shut in during the 1970's. This well was tested in the early part of Marion's initial operations in order to establish a future work program for the Clear Creek gas field. A production test undertaken at the time indicated that the reservoir being accessed by the well had not been fully drained and production spot rates of approximately 1 million cubic feet of gas per day were achieved during testing. The well was considered uneconomic at the time due to the costs of disposing of water produced by the well. With the Company now owning its own water disposal well, management believes production from this well will now be economic.
For the well to achieve its full productive capacity, the fluid (water) level in the well bore will need to be drawn down through pumping operations to relieve the back pressure on the producing reservoir. The well has now undergone successful pressure testing thereby establishing the mechanical integrity of the well. An electrical submersible pump will shortly be installed in the well. This will enable the pumping operation to draw down the fluid level to enable production to commence.
This well is the second of an extensive well workover program (involving up to a total of 16 wells at Clear Creek). These 16 wells are a mix of wells drilled by the Company and also some old wells that the Company believes may be able to be profitably brought back onto production.
As has been indicated in recent releases to the ASX, the Company is targeting the March 2011 quarter to establish meaningful production from the Company's wells.
The Company will further update the market through progress updates as meaningful information becomes available.
The Company has a 100% working interest in the Clear Creek field.
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