Texon Petroleum Limited (ASX:TXN) June 2010 Quarterly Report
Brisbane, July 30, 2010 AEST (ABN Newswire) - Texon Petroleum Limited (
ASX:TXN) is pleased to release its June 2010 Quarterly Report.
LEIGHTON OLMOS - SALE OF 20% WI
A 20% WI in the Leighton Olmos reservoir was sold in July to a US based oil and gas company for A$7.9 million (US$6.7million). The sale is over 1,280 acres of the Olmos only and does not include the lower EFS reservoir. The Company retains an average of 59% WI in the Leighton Olmos reservoir after the sale.
CAPITAL RAISING
A successful capital raising of A$14.2m by a placement of 40.6 million shares to sophisticated and institutional investors at 35 cents per share was completed at the end of June. The shares will be issued in two tranches: tranche one of 17.86 million shares was allotted 8 July and tranche two of 22.74 million shares will be allotted subject to shareholder approval at a general meeting on 9 August.
The funds are earmarked for the drilling of two (possibly three) horizontal Eagle Ford wells on the Leighton/Mosman/Rockingham acreage and together with the Leighton sale funds make a total of about A$22million (US$18.8milllion) before costs. These funds will enable the Company to proceed with the drilling programme outlined below.
PRODUCTION
Production for the quarter was:---------------------------------------------------------- Gas (mmcf) Oil (mbbl) Total (mmcfe)----------------------------------------------------------Gross 261.8 27.6 427.7Nett (Texon share)* 159.6 14.9 249.1----------------------------------------------------------Year to date (6 months):---------------------------------------------------------- Gas (mmcf) Oil (mbbl) Total (mmcfe)----------------------------------------------------------Gross 477.9 52.6 793.3Nett (Texon share)* 292.3 28.1 460.9----------------------------------------------------------
Gross average daily production for the June quarter was 2,877 mcfgpd and 304 bopd (Texon's share*: 1,754 mcfgpd and 164 bopd) from 13 producing wells.
As of 15 July 2010, the average daily production for July was Gross: 3,177 mcfgpd and 310 bopd (Texon's share*: 1,890 mcfgpd and 164 bopd).
* Texon's beneficial NRI share.
GAS PRICES
For the first four (4) months of 2010, the Henry Hub average spot price was US$4.87/mmbtu. During the same period, Texon received an average price of US$6.58/mcf for all its gas and a price of US$7.77/mcf for its Leighton Olmos gas.
EAGLE FORD PROJECT (37mmboe)
The Company has located a rig to drill two (2) to three (3) Eagle Ford wells in the Leighton/Mosman/ Rockingham area. The first well will commence drilling mid September in the Leighton project area. The well will offset the recent Swift Eagle Ford discovery some 200m south of Leighton and its trajectory will take it within 275m of the TR#4 well which penetrated 142ft of EFS. Should the well be successful it can be tied into the existing Leighton production facilities. The Company will have a 70% WI (52.5% NRI) in the well.
The rig will then be released to another operator and on its return the second well is planned to be drilled beginning in December, possibly on the Mosman/Rockingham leases. Depending on the exact location, the Company will have an estimated 95% WI (71.25% NRI) in this well. The well trajectory will pass nearby to the MR#1 well where the EFS reservoir was similar in thickness and quality to the Tyler Ranch #4 in the Leighton field.
The MR lease lies some 2.5km from another Swift Energy (NYSE:SFY) EFS discovery which had an initial production rate of 1,100bopd and 1mmcfgpd.
For the complete Texon quarterly report including figures, please refer to the following link:
http://www.abnnewswire.net/media/en/docs/63443-ASX-TXN-222481.pdf
Contact
Dr. John Armstrong
Chairman
Brisbane: TEL: +61-7-3211-1122
Mr. David Mason
Chief Executive Officer
Brisbane: TEL: +61-7-3211-1122
Houston: TEL: +1-281-419-4976
(Houston is 15 hours behind Aust. Eastern Standard time)
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