Melbourne, Mar 26, 2008 AEST (ABN Newswire) - Marion Energy Limited (ASX: MAE)(PNK: MAEJF) is pleased to announce that it has made a significant new gas discovery at its Helper, Utah Project with the successful drilling of the Kenilworth Railroad 1-A ("KRR 1-A") well. This well has been connected to the existing Helper gathering infrastructure and was placed on production at a rate of 1.5 million cubic feet of gas per day which it is selling into the market. The Company believes that this could be a significant discovery.
- Well Details.
The KRR 1-A well was drilled with a primary target of the deeper zones below the Ferron horizon which is currently producing coal bed methane gas. The Company drilled the well in a manner where it could alternatively be converted into a water disposal well, in the event that the deeper formations turned out to be non productive. During drilling, the well exhibited numerous strong gas shows, as well as gas flows to surface from 5,300 feet to 7,900 feet and the pressures encountered in this interval were abnormally high. The Company elected to complete and perforate a 50 feet thick section at a depth of approximately 5,550 feet in the Morrison sand formation from which the discovery was made. The remainder of the potentially productive section (5,300 feet to 7,900 feet) will be tested in offset wells.
- Potential for further discoveries.
The significance of this discovery is unknown at this point, as the areal extent of the reservoir has yet to be established, and most of the potentially productive section in the discovery well has not yet been tested. This is the first productive well drilled in this reservoir section within a 50 mile radius of the KRR 1-A well. The Company has over 9,000 acres of leases in this part of Helper play and believes that, based on current knowledge, 3,800 acres are possibly productive in this new reservoir.
Clear Creek Production Update
The Company now has five Ridge Runner wells on production at its Clear Creek, Utah project.
- Ridge Runner ("RR") 13-17, 11-17, 11-20, 1-30 and 2-19 wells.
The Ridge Runner ("RR") 13-17, 11-17, 11-20, 1-30 and 2-19 wells have been connected to the permanent pipeline and are now delivering and selling gas into the distribution grid. Production levels are expected to further increase and then stabilize within the next two to three weeks, as the water which is always associated with initial production in the Clear Creek wells is pumped down to below the perforated interval.
Stabilized production of the original wells at Clear Creek was in a range of 1 million to 5 million cubic feet per day, with most wells producing at the upper end of this range. Currently all results to date for Marion's wells point to stabilised rates for these new wells being achieved within this range.
- Alpine School District ("ASD") 6-17 and 3-17 wells.
Construction of the gathering line to the ASD 6-17 and 3-17 is in progress and in the absence of further weather delays, we expect these wells to be brought on stream over the next two weeks.
As wells reach stable production levels, flow rates for the Clear Creek wells will be released to the market.
It was originally anticipated that Clear creek production would be on full capacity by mid January, but the most severe winter storms encountered over the past ten years were experienced in the Rocky Mountains and in particular in Central Utah, resulting in Marion's plans being set back several months. However, winter is virtually now over and further weather related interruptions of any length are unlikely.
Marion Energy CEO, Mr. Jeff Clarke commented that "the new discovery at Helper opens a potentially significant new gas resource for the Company. Together with the ramp-up of production at Clear Creek, the Company's Utah operations are entering an exciting phase as they start to generate significant revenues and cash flow, thereby commercializing the reserve base."
For additional information about the Company, please visit the company's
website at www.marionenergy.com.au
Contact
North American Contact:
Mr Jeff Clarke
Managing Director & CEO
Ph: +0011 214 244 7690
Email: jclarke@marionenergy.com
Australian Contact:
Mr Peter Collery
Executive Director and Company Secretary
Ph: 03 8862 6466
Email: peter@marionenergy.com.au
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