Pennpetro Energy
Plc
Operational Update on
Extended Well Testing, Facilities Agreement and Director
Changes.
Highlights:
•
9,053 barrels produced in Texas to date since well
testing at Chalk Talk wells commenced.
•
8,601 barrels of oil sold to date.
•
Well testing continues to optimise oil
production.
•
Long-term surface oil storage facilities agreement
reached with Millennium Petrocapital Inc.
•
Director change at Nobel Petroleum, the
Company's 100%
operating subsidiary in Texas.
London, 25 March 2024 -
Pennpetro Energy PLC (LSE: PPP) ("Pennpetro" or the "Company"), the
independent oil and gas company focusing on development and
production in the Peach Creek (Austin Chalk) Oil Field in Gonzales
County, Texas, USA, is pleased to provide an interim update from
the Company's 100% Chalk Talk #1H ("CT1H") well testing
program.
In early December, the Company
announced that oil production from the extended well testing
programme from CT1H saw average oil production for November 2023 of
161 barrels of oil per day (bopd) and saw oil flows at the end of
November exceed 400 barrels of oil per day with increasing levels
of gas. At these high rates, total fluid being produced was of the
order of 600-700 barrels per day and was being pumped to surface
using a downhole electric submersible pump (ESP).
The well then experienced a number
of top-of-well and bottom-of-well technical issues which required
technical intervention and resulted in a sustained fall in overall
daily production.
Since the last report, the quantity
of fluids pumped to surface experienced a fall due to a number of
holes developing in the high-pressure production tubing above the
pump. The faulty tubing has since been replaced and oil has been
intermittently produced in the period, as staff and consultants on
site dealt with remedying the lower production rates experienced
since the recent work-over.
Although the holes in the production
tubing have now been repaired, oil production has still not been
restored to the high levels seen in November. This is due to
fragmented generator and pump electrical issues and potential well
blockages forming again below the pump depth whilst the well was
off-line being repaired. The Company is working with Halliburton
and Summit Pumps to address the ongoing issues still being
experienced to steady the well's production.
The CT1H well has now been put back
to pump and current oil production is running at between 30 barrels
of oil per day and 70 barrels of oil per day. A new work-over
planned for the coming months, to clean the well 1,000 feet along
the horizontal, would aim to get the CT1H well back into much
higher oil production rates.
By way of an overall update on oil
production and sales from the Chalk Talk 1H well (since the 1
November 2023 pump start), the well has produced a total of 9,053
barrels of oil with oil sales to date totalling 8,601
barrels.
With respect to the CT4H well
testing, this well was temporarily put to test, producing
approximately 600 barrels of oil before being shut in again to
allow all efforts on site to be directed towards the remedial
repair works on the CT1H well.
In addition, Pennpetro has managed
to secure the extended use of the surface oil storage facilities
located at Whistling Straits 5 with a long-term rental agreement
with Millennium at US$10,000 per month.
Director Changes:
After having worked in the oil and
gas industry for 46 years, Mr Andy Clifford has decided to retire
from his Board position with Pennpetro Energy PLC and as the
President of Nobel Petroleum USA Inc.
He will retain a significant
shareholding position in the company and will be available for
consultation.
The Company is pleased to announce
that it has appointed Deane Pierce as interim President of Nobel
Petroleum Inc with immediate effect.
Deane has been working with Andy
Clifford on Nobel's
activities from the beginning and is well versed on the
Company's assets in
Texas.
Deane Pierce has over 30
years' experience
in petroleum operations and finance in a variety of operating areas
including the Texas and Louisiana Gulf Coast, West Texas,
Mid-Continent, and Rockies.
He started with Hunt Energy Company
after graduating from Texas Tech University in Petroleum
Engineering and progressed from various engineering assignments to
Gulf Coast Operations manager. From there he transitioned to
International with ARCO Oil and Gas as North Africa Area Manager.
He later joined the predecessor to the EOG Resources working as
Engineering Manager in key start-up projects.
He joined Vanco Energy in 2000 as
Operations Manager and completed a number of West Africa projects
in Deep Water. He joined El Paso Oil and Gas in 2005 as South
American Area Manager responsible for a number of offshore
development projects offshore Brazil. After El Paso sold its
International Division Deane joined Odebrecht Oil and Gas in 2010,
headquartered in Rio de Janeiro, handling West and
Brazil.
After leaving Odebrecht, Deane
became President and CEO of ADP Energy ventures which provides
capital, engineering services and consulting where he has been
involved with projects in Oklahoma, Louisiana and the Texas Gulf
Coast including the Austin Chalk.
Deane has invented some key
horizontal inflow and completion devices which have helped increase
oil production and reduce water and gas cut. He has utilised state
of the art perforating and inflow technology to improve marginal
field performance and reduce operating cost. He is a
registered Petroleum Engineering and has authored a number of
technical papers dealing with improving well performance,
completion technology and reducing well costs.
He has an engineering degree from
Texas Tech University and an MBA in Finance from Dallas Baptist
University.
Lastly, the Company has been engaged
extensively in negotiations with a suitable board replacement for
Andy Clifford on the Pennpetro board and look forward to updating
shareholders further when contracts have been finalised.
Tom Evans, Pennpetro Energy's
CEO said:
"We are gradually learning what is required to maintain steady
oil production from our Chalk Talk wells in Texas. We initially saw
excellent production from our Chalk Talk 1H well getting to an
amazing 700 barrels of fluid per day with oil production peaking at
410 bopd in late November, then down hole issues in December saw a
decline in the well's
performance. It took some time to realise that the decline in oil
production experienced in December was primarily due to a quarter
inch hole that developed in the production tubing at around 7,500
feet depth. This combined with reduced fluid flow to the well bore,
due to the well potentially collapsing below the pump level has
seen the CT1H well run well below expectations. We are working with
our consultants at Halliburton and Summit to bring the well back to
its full production potential and this work is ongoing. The good
thing is we continue to see oil coming to surface as we address the
issues at CT1H and we continue to receive oil sales with last
month's net sales equating to
US$48,470.26, for PPP, which shows the robust economics of our
acreage. We are optimistic that a further work-over, to clear the
potential blockages below the pump, will see this well produce much
better than the current circa 50 bopd. We have over 2,000 acres of
prime oil ground in Gonzales County in Texas and this acreage has
the potential to build a robust oil production
company."
"I
am also delighted that Deane has accepted the challenge to be the
interim President of Nobel Petroleum Inc. He has been involved
alongside Andy since 2018 and knows our assets and relationships
well, meaning a seamless transition with little interruptions to
our day-to-day operations."
-ENDS-
This announcement contains inside
information within the meaning of Article 7(1) of (i) Regulation
(EU) No 596/2014 of the European Parliament and of the Council of
16 April 2014, as amended (the "EU Market Abuse Regulation") and
(ii) the EU Market Abuse Regulation as it forms part of United
Kingdom domestic law by virtue of the European Union (Withdrawal)
Act 2018.
For
further information visit www.pennpetroenergy.co.uk
or follow us on X @pennpetro or
contact:
Pennpetro Energy PLC:
Tom Evans, CEO
David Lenigas, Chairman
|
tme@pennpetroenergy.com
+44 (0) 7881825378
lenigas@monaco-capital.com
|
Brokers:
Zeus Capital
Simon Johnson
|
+44 (0) 207 614 5900
|
Peterhouse Capital Limited
Lucy
Williams
Duncan Vasey
Flagstaff Strategic and Investor
Communications
Tim Thompson
Alison Allfrey
Anna Probert
|
+44 (0) 20 7469 0930
+44 (0) 20 7220 9797
+44(0) 207 129 1474
pennpetro@flagstaffcomms.com
|
NOTES TO EDITORS:
Pennpetro Energy is an independent
oil and gas company focusing on production in the Gonzales Oil
Field in Texas, USA. Shares in the company were admitted to the
Official List of the London Stock Exchange by way of a Standard
Listing on 21 December 2017 with the ticker symbol
"PPP".
Its wholly owned subsidiary, Nobel
Petroleum USA Inc. has a 100% Working Interest in 2,036.38 acres in
Gonzales County in Texas. These acres include the Whistling Straits
#5 well and the Chalk Talk #1H and #4H wells. Noble also has a
Participation, Development and Option Agreement and Joint Operating
Agreement with Texas based Millennium PetroCapital Corporation over
a 250,000-acre Area of Mutual Interest in Gonzales County, Texas,
aimed at exploiting the prolific proven Austin Chalk oil and gas
play. Pennpetro Energy has also recently signed a conditional
binding agreement to conduct a new 3D seismic survey on the Horse
Hill Oil Field near London's Gatwick Airport which paves the way to
drilling the next production well (HH-3) for 49% of the revenue of
this proposed well.