Grand Gulf Energy (ASX:GGE) has increased oil production for quarter ended 30 September to 16,667 barrels from 15,392 barrels in the previous quarter.
Along with gas production of 21.4 million cubic feet, this delivered gross revenue of A$1.93 million.
This is little change from revenue of A$1.99 million in the previous quarter.
After royalties, production and development costs the company delivered $1.1 million to fund exploration and administration costs for the quarter.
The majority of the company’s oil production came from its 35.6% owned Hensarling-1 well in the Desiree Project in Assumption Parish, Louisiana.
Hensarling-1 produced a total of 36,659 barrels of oil during the September quarter at an average rate of about 399 barrels per day.
This well generated net revenue of US$290,000 per month to GGE.
Net Proved Reserves to the company are estimated at 309,000 barrels as at 30 June 2014.
Other producing wells include:
- Dugas & Leblanc-3 (40% WI): This well is presently producing at gross production rates of 100bpd of oil and 585 barrels of water, through a 21/64 inch choke. The D&L-2 well was successfully converted into a salt water disposal which will significantly reduce water disposal costs. During the period, net revenue (after operating costs) averaged about $75,000 per month;
- West Klondike (11.7% WI): The well commenced production on 2 September 2014 and is presently producing about 1.5 million cubic feet of gas and 15 barrels of condensate per day through a 7/64 inch choke from the Lower Nod Blan. Based on current production rate, net revenue (after operating costs) is estimated at about $14,000 per month; and
- Abita (20% WI): The SL 19706-1 well choke was increased to 8/64 and the well is presently producing 1.5MMcf/d and 15bcd. Net revenue is estimated at about $27,000 per month.
The Templet-1 has been suspended and will be converted into a water disposal well for
Hensarling-1 after logs indicated that the well was uneconomic.
Grand Gulf Energy has continued building its geological and geophysical database over the September quarter.
This includes the identification and review of a number of new projects on the Napoleonville Dome, some with near term drilling potential.
The reprocessed data is proving to be very beneficial and together with the frequency attribute work a number of new project opportunities have been identified.
The strong oil production in the September 2014 quarter is a testament to the quality of Grand Gulf Energy’s Desiree Project targeting the Napoleonville Dome.
Its revenue of A$1.93 million also places the company well on the way towards surpassing its FY2014 revenues of $7.5 million.
Proactive Investors maintains its share price target valuation of $0.035 within 6-12 months.
Grand Gulf Energy had A$2 million in cash at hand as at 30 September 2014.
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