HOUSTON, May 24, 2007 (PRIME NEWSWIRE) -- The Meridian Resource Corporation (NYSE:TMR) today announced initial production test results on its Katherine Leary No. 1 well, located in Polk County, Texas, in the Company's East Texas Austin Chalk Play. The well was recently tested over a several day period at gross daily flow rates as high as 19.2 million cubic feet of natural gas per day ("Mmcf/d") and 480 barrels of oil per day ("BOPD"). Flowing tubing pressure was measured at approximately 2,800 pounds per square inch ("psi") through a 48/64th-inch choke.
The dual lateral well was placed on production shortly after the start of the test, and is still in a "clean-up" of drilling fluids phase with intermittent fluctuations normally experienced during the first several day phases of production for wells similarly drilled and produced in the area. The well is currently producing approximately 13 Mmcf/d into sales in addition to approximately 460 BOPD. The Company's working interest in the well is approximately 56% (40% net), subject to terms of unitization, lease royalties, acreage and farmout agreements previously negotiated with the third party working and mineral interest owners in the well.
The well was drilled vertically to approximately 13,000 feet, then added two horizontal laterals. The first lateral extends approximately 5,300 feet in length with the second extending approximately 5,600 feet for a total wellbore exposure in the Austin Chalk of 10,900 feet. The well is on trend with other Austin Chalk wells in the area which are located approximately nine miles to the east, and approximately two miles northeast of the Company's BSM No. 1 well. The Company expects that the well will display similar producing characteristics to other Austin Chalk wells in the area, with the typical hyperbolic decline curve from current production levels during the coming months.
The Company is currently drilling two other wells is the area, the Blackstone Minerals No. 2 well and the Black Stone Minerals No. 4 well. The BSM No. 2 is a single lateral horizontal well, located approximately three miles to the southwest of the Leary well. The BSM No. 4 well is also a single horizontal lateral. This well is designed to drill vertically to approximately 13,000 feet before turning horizontal to drill approximately 5,000 feet in the Austin Chalk formation.
The Company is testing the drilling of single laterals wells versus dual lateral wells to determine the best methods to develop the field, improve drilling time, improve ultimate recoveries of reserves and fully develop the play in a timely manner at less initial cost. Lease acreage positions and unitization designs, determine, in part, the locations and decisions where this concept, if successful, can be applied.
The Company and its joint venture partners currently hold approximately 33,000 gross acres in the play. The Company is aggressively working to increase its position in this very competitive area and is in the final stages of completing title and documentation of an additional 20,000 plus gross acres. With the additional acreage, the number of possible locations increases in general terms, to approximately 50, thereby providing the Company with enough drilling inventory for the next several years. The Company anticipates that two rigs will remain in the East Texas area to develop the play for the foreseeable future. Meridian is the operator of the field on behalf of its joint venture partners and will generally hold between 37% and 75% WI.
The Meridian Resource Corporation is an independent oil and natural gas company engaged in the exploration for and development of oil and natural gas in Louisiana, Texas, Oklahoma, Kentucky and the Gulf of Mexico. Meridian has access to an extensive inventory of seismic data and, among independent producers, is a leader in using 3-D seismic and other technologies to analyze prospects, define risk, target and complete high-potential wells for exploration and development. Meridian is headquartered in Houston, Texas, and has offices in Tulsa, Oklahoma as well as a field office in Weeks Island, Louisiana. Meridian stock is traded on the New York Stock Exchange under the symbol "TMR".
Safe Harbor Statement and Disclaimer
Statements identified by the words "expects," "projects," "plans," and certain of the other foregoing statements may be deemed "forward-looking statements." Although Meridian believes that the expectations reflected in such forward-looking statements are reasonable, these statements involve risks and uncertainties that may cause actual future activities and results to be materially different from those suggested or described in this press release. These include risks inherent in the drilling of oil and natural gas wells, including risks of fire, explosion, blowout, pipe failure, casing collapse, unusual or unexpected formation pressures, environmental hazards, and other operating and production risks inherent in oil and natural gas drilling and production activities, which may temporarily or permanently reduce production or cause initial production or test results to not be indicative of future well performance or delay the timing of sales or completion of drilling operations; risks with respect to oil and natural gas prices, a material decline in which could cause the Company to delay or suspend planned drilling operations or reduce production levels; and risks relating to the availability of capital to fund drilling operations that can be adversely affected by adverse drilling results, production declines and declines in oil and gas prices. These and other risks are described in the Company's documents and reports, available from the U.S. Securities and Exchange Commission, including the report filed on Form 10-K for the year ended December 31, 2006.
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