HOUSTON, Oct. 3, 2007 (PRIME NEWSWIRE) -- The Meridian Resource Corporation (NYSE:TMR) today announced completions and test results on wells in its Texas Gulf Coast, South Louisiana, East Texas and Mid-Continent regions. In addition to these completions, the Company has ongoing drilling activity in each area along with its two rig program in East Texas and one rig active in the New Albany Shale play in Kentucky.
Texas Gulf Coast
The Company's south Texas Nueces Bay area continues successful operations and discoveries. Recently, the ST 976 No. 2 well on the East White Point prospect was drilled, completed and tested. The well was drilled to approximately 13,650 feet measured depth ("MD"), targeting numerous Frio sands. Approximately 55 feet of the primary objective sand (the Lower Guedin located at about 11,600 feet) was perforated. The well was tested directly into sales at a gross daily flow rate of 7.1 Mmcf gas per day with approximately 700 barrels of condensate. Flowing tubing pressure was measured at approximately 4,750 psi through a 16/64th-inch choke. This is the same sand that was successfully discovered and exploited in the previously drilled B.P. America well during the fourth quarter of 2006. The Company owns approximately 23% non-operated working interest (17% net) in the well.
South Louisiana
Thornwell Field, located in Jefferson Davis Parish, continues to render exploitation-styled wells and production. This field was acquired as part of the Shell Oil south Louisiana asset package in 1998. Meridian generated and drilled the first exploration well in this field during 1999. Since that time, Meridian and its partners have drilled over 23 successful wells in the field, resulting in the discovery of over 100 Bcfe, gross. Recently, the Company participated in the drilling of the Potter 33 No. 3 well in Thornwell Field. The well was drilled to approximately 11,950 feet and logged over 100 feet of overall gas pay in the "Bol Perc" sand section. The well was tested at a gross daily flow rate of up to 5.7 Mmcf gas per day with approximately 200 barrels of condensate. Flowing tubing pressure was measured at approximately 7,300 psi through a 13/64th-inch choke. Production from the well is flowing directly into sales. Meridian owns approximately 30.3% non-operated working interest (20.2% net) in the well.
In other operations, the Company is participating in the Johnson No. 1 exploration well which is located in Acadia Parish, Louisiana. The well is currently at approximately 10,000 feet, targeting sands in the Upper Frio formation at a depth of approximately 15,000 feet. Meridian owns approximately 30% working interest in the well.
East Texas
This resource-styled play has become a significant piece of the Company's growth plan for reserve replacement and increased production. Meridian currently holds leases on approximately 63,000 acres and continues to improve its position in this active play area. Plans include the addition of approximately 20,000 acres in the near term.
The Company has reached total depth on its Blackstone Minerals No. 2 well ("BSM"). The single lateral well was drilled vertically to approximately 13,100 feet with the horizontal portion extending out approximately 5,900 feet into the Austin Chalk formation. Currently, Meridian is completing the well and, barring any unforeseen equipment or downhole issues, it is anticipated that this well will be tested within the next ten to fifteen days.
In addition, in the immediate area and as a result of acreage positions held by the Company, Meridian is participating in the Bear Creek No. 1-H well. This well reached total depth (18,900 MD) on the first of two scheduled horizontal laterals and is currently at approximately 16,500 feet MD on the second lateral. The well is approximately five miles northeast of Meridian's primary operating area. Meridian holds approximately 7% working interest in this outside operated well.
The Company continues to develop this play with additional wells scheduled on a continuing basis starting with the BSM No. 5 well and the Freeman No. 1 well. Each well is scheduled to drill and complete dual horizontal laterals extending north and south between roughly 5,000 and 6,000 feet each. The rig currently being utilized for the drilling of the BSM No. 2 well will be moved to drill the BSM No. 5 well. A separate rig has been contracted to move onto the Freeman No. 1 well and is in the process of completing its current drilling obligation for an offset operator in the immediate area. They are expected to be moving the rig on site within the next thirty days.
The Company previously announced the purchase of a "flex" rig, which will be dedicated to the East Texas area upon its anticipated delivery during late fourth quarter. At that time Meridian will have three rigs operating in the area until early in the second quarter of next year. Two of the three rigs will be operated, maintained and crewed by Orion Drilling Company LP. One of the rigs will be owned by Meridian and one will be on a long term contract in this area. It is anticipated that Orion's management and operations of the rigs will improve drilling efficiencies and costs for these wells. Depending on the success of the operations in the play, the Company has plans for at least a two-rig, multi-well drilling program to exploit the Company's acreage under lease for an anticipated three to five-year period.
Oklahoma Mid-Continent Play
As previously announced, in the Mid-Continent area, the Company recently reached total depth on the Benkendorf No. 21-1 well. This well was drilled in the Nash area of the Greater Carrier Hunton-Woodford de-watering play in Grant County, Oklahoma. The well was drilled to approximately 6,400 feet and was logged with possible pay as expected in the Hunton formation. This well is scheduled to be completed within the next seven to ten days, and initiate the de-watering process (if necessary) in the coming months, or as soon as the gathering line can be constructed and the well tied into the line. Meridian operates the field and owns approximately 80% working interest.
Unconventional Resource Areas
In the Illinois Basin, Meridian recently reached total depth on its first well, the Farms of Meadow Hills No. 1 well. This well was drilled to 4,600 feet, targeting the Devonian New Albany Shale formation. The plan forward for this well is to run a full suite of logs and gather core samples for thorough geochemical analysis. A second well, the Keach No. 1 well, was recently spud and is currently at 3,900 feet, also targeting the New Albany Shale formation. The Company currently owns an approximate 30,000-acre lease position. The Company's working interest in the play is 92% with Meridian as operator.
In the Delaware Basin, the Company and its joint venture partner have completed their evaluation of the previously acquired 2D seismic in the area and have selected the first two locations to be drilled in the fourth quarter. These wells will target the Barnett and Woodford Shale sections which range between 5,500 and 8,500 feet. Targeted unrisked reserves range between 2 and 3 Bcf per well. Meridian's 50% joint venture partner will operate substantially all of the drilling and production for the project. The group owns approximately 85,000 acres in the area.
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.