Melbourne, July 10, 2008 AEST (ABN Newswire) - Marion Energy Limited (ASX:MAE) is pleased to announce that the gas and water pipeline systems connecting the Alpine School District ("ASD") wells to the main compression and processing facilities at Clear Creek, Utah has been laid and commissioning of the upgraded facilities has commenced. During this completion phase, it was necessary to shut the field in, as tie-ins were made, and safety tests carried out. Shut-in periods will also occur from time to time as the ASD3-17 and 6-17 wells, together with the Ridge Runner wells, are all brought on stream and production is increased to its full capacity.
The Company has now tied both the northern and southern ends of the field into the main processing point. The pipeline system crosses challenging terrain with over 1200 meters of major vertical topographic changes, including many hills and valleys.
The ASD wells were not tested after well completion given the knowledge gained from the drilling of the Ridge Runner wells. The original wells drilled in the 1950's produced over 137 billion cubic feet ("Bcf") of natural gas at an average of over 8 Bcf per well, with some wells exhibiting sustained production rates in excess of 10 mmcf/day. Marion believes that based on initial indications, the new wells currently drilled, tested and tied into production exhibit the characteristics of the original wells drilled in the 1950's.
The ASD wells appear very similar in character to the earlier wells drilled and are expected to perform in a similar manner.
The Clear Creek project which is being developed by Marion is virtually a new field as it had been approximately 30 years since any drilling activities took place there. As such, during the last six months of operations management has come to have a much better understanding of the production operations required of this field and of the larger amount of time necessary than was originally anticipated to bring the wells onto full production and to establish consistent stabilized production rates. Based on this understanding, it is now anticipated that the ASD wells will take from 4 to 8 weeks to complete the commissioning operations.
The drilling, completion and production operations over the last 6 months have confirmed to management that the Clear Creek field is an exciting field with a large resource base which will produce substantial gas for the Company.
The Company has previously announced 290 Bcf of 2P reserves based on a June 2007 reserve report by an independent engineering firm. A new reserve report has been commissioned which is to include an assessment of all the reserve resource potential on the Company's leases. The results of this reserve and resource report will be announced upon its completion.
Contact
North American Contact:
Mr Jeff Clarke
Managing Director & CEO
Ph: +1 214 244 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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