Iona Energy Provides Update on UK Southern North Sea Gas Operations

abarrelfullabarrelfull wrote on 26 Jul 2012 06:54
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June 23, 2011

Iona Energy Inc. ("Iona" or the "Company") (TSX VENTURE:INA) provides the following update on its UK Southern North Sea gas operations.

Iona completed the acquisition of a 20% working interest in the Trent and Tyne gas fields from Perenco on May 31, 2011 as planned. Trent and Tyne are located in UKCS Blocks 43/24 (Licence P609) and 44/18a (Licence P685) respectively. As part of the transaction Iona also purchased a share of the ETS gas export pipeline system which transports gas from four fields (including Trent & Tyne) to the UK mainland at Bacton.

The effective date for the transaction was September 1, 2010. Gross production from September 1, 2010 through May 31, 2011 was approximately 3.02 Bcf or 600 MMscf net to Iona, generating USD$4.64 million in gas sales revenue net to Iona. Trent and Tyne gross production rates for May 2011 averaged 13 Mmscf per day or 2.6 Mmscf per day (450 boepd) net to Iona. Gas sales revenue net to Iona for May 2011 was USD$688,000 at an average sales price of 54.7 p/therm (approximately USD$8.70/mcf). On peak days Iona net production was 3.2 Mmscf per day or 550 boepd.

Average production rates have been lower than expected due to operational uptime issues with a backup gas export compressor on the normally unmanned Trent platform. The backup compressor has been ashore for refurbishment and is currently being re-installed in the field. Iona expects improvement in offtake levels and therefore overall production in Q3 2011 due to improved maintenance efficiency and operating uptime.

A Tyne in-field sidetrack of the existing T5 well into already proven producing layers of the reservoir and a workover of the existing T1Z well are in the planning stages and are expected to significantly ramp up field gas production in 2012.

Dave Sherrard, Iona's Chief Development Officer commented "We are delighted to have closed this important transaction that adds production and generates net income and cash flow. We have exciting plans with our partner to grow this production significantly through a fully funded and busy program of activity through 2011 and into 2012."


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