The well will be drilled over a measured distance of around 5300 feet with a vertical depth of around 4200 feet. Drilling is expected to take 15 – 20 days.
Meridian Petroleum is partnering on Pontiac with Wellmaster, the current contract operator of the Orion well, and will have an initial working interest of 75%. This will revert to 56.25% once Meridian Petroleum has recovered its share of drilling and completion costs. Royalty levels on the Pontiac well are high at 32%, so Meridian Petroleum’s working interest position will translate into a net revenue interest of 51% initially, and then adjusted to 38.25% after cost recovery.
Pontiac will be a relatively low cost well to drill and the company has assessed it as having a 50% likelihood of success. If the well were to become a successful gas producer then similarities to Orion are expected in terms of gas quality, recoverable reserves (2-3 bcf) and production profile. However, the peak production rate of 6 mmcfd set by Orion is unusually high for a reef of this type and the company does not currently anticipate such high peak rates from Pontiac.
Stephen Gutteridge, Chairman of Meridian, said:
We are pleased to have commenced drilling on the Pontiac prospect. The Company has the benefit of nearly two years of production experience at Orion, and with production facilities and a customer already available, completion and hook-up of a successful well should be relatively quick and straight-forward.
