Perth, June 8, 2006 AEST (ABN Newswire) - Alto Energy International Limited (ASX: AOI) (Alto) is pleased to provide an update of its Appalachian operations.
Highlights
- New pool gas discovery at Little Sandy Project (Kentucky), with tested open flow rates of up to 190,000 cubic feet per day
- Home Run (Kentucky) production steady at 220,000 cubic feet per day
- Completion activities in Cornstalk (West Virginia) flow gas from lower secondary target
Little Sandy (Kentucky)
The third well in the Little Sandy Project (Tussey-1) has open flowed at rates of 120,000 to 190,000 cubic feet per day. These rates were significantly hampered by water slugging, and improved rates can be expected as the well cleans up. Although the Tussey well will not be brought into production for some time due to pipeline access, the discovery of gas at the Berea level has significantly improved prospectivity in the Little Sandy region.
Alto has been carried through the initial three well programme at Little Sandy by Norwest Energy Limited, and has a 30% working interest in 12,700 acres.
Home Run (Kentucky)
Seven of the nine wells in the Home Run Field are now in production, with individual rates still stabilizing. The field is producing at 220,000 cubic feet per day (Alto share - 160,000 cubic feet per day). Production is from the Weir Sandstone and fractured Corniferous Limestone, in addition to the Devonian Shale. The remaining two wells have been difficult to access due to poor road conditions, but are expected to be put in line in the next few weeks.
The Operator, Hay Exploration, has initiated planning for a further 5 well drilling programme in the field, which will commence in the third quarter 2006.
Under the Participation Agreement with Operator Hay Exploration, Alto gained access to four existing well bores to frac at the Devonian Shale level. The farmin agreement also provided for the drilling of five wells in the Home Run project, followed by an optional further five well program.
Alto is funding 100% of the four well completions and the potential 10 well drilling program, earning 50% revenue from the existing wells and 75% of the revenue from the drilled wells. Alto will then have a 50% Working Interest in all subsequent wells within a 20,000 acre area.
Cornstalk, Bug Run and Green Park (West Virginia)
Hydraulic fracture operations have been initiated in the Cornstalk Project in West Virginia. The operations commenced with the fracing of two wells at the lower Rhinestreet Shale, which was a secondary target of the wells. The individual wells flowed gas to atmosphere at unstabilized initial rates of up to 130,000 cubic feet per day. The Operator, Ascent Energy, is now planning frac operations for the primary target Devonian Shale. Operations have commenced for connecting these wells to an existing gas gathering system at the Apple Grove Field.
Under a Participation Agreement between Ascent, Norwest and Alto, Ascent will pay Alto and Norwest's share of costs of drilling and completing the first three wells in this region. Ascent is an experienced operator in the onshore US, and has been introduced to the project to build a strong local experience base and to systematically introduce techniques and technology which will optimize the gas potential within the shale section. Alto has a 29% working interest in 36,000 acres in the Cornstalk, Bug Run and Green Park Project.
Alto Energy is one of Australia's early movers into the lucrative US unconventional gas market. Alto Energy is focusing on the Appalachian Basin, one of the oldest and most mature onshore hydrocarbon provinces in the US, and has approximately 75,000 gross acres over five main project areas across Kentucky, Tennessee and West Virginia. An active drilling campaign is planned for the first half of 2006. Alto Energy is drilling in mature areas at shallow depths with projects close to existing infrastructure. Alto Energy operates a US office in West Virginia employing a full time Country Manager.
Source:
Purple Communications
Level 3, 28 Kings Park Road, WEST PERTH WA 6005
Ph: 08 9485 1254 Fax: 08 6263 0455
purple@purplecom.com.au
Contact
Greg Channon
Managing Director & CEO
Tel +61 (0) 8 9324 3011
Email: greg.channon@altoenergy.com.au
Andrew Dimsey
Director Business Development
Tel + 61 (0) 8 9324 3011
Email: andrew.dimsey@altoenergy.com.au
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