The Nichols # 1 well has been drilled to a depth (TD) of 3,386 feet with additional pay zones at 3,104 feet and 3,126 feet. The well was flowed and volumetric calculations indicate it will produce 1.2 billion cubic feet (bcf) at up to 1.3 million cubic feet (mmcf) per day.
A gas purchase contract has been agreed and a three inch pipeline will be installed in the coming weeks. This will require installation of a sales line 2,000 meters long at no additional cost to San Leon Energy.
The Nichols # 1 is the first of a four well programme in the field. Following geological investigation, McCown Engineering calculate that each well-site is expected to produce reserves of 1.2bcf or a total field size of 5bcf of natural gas at a completion cost of $230,000 per well.
A full update of operations, reserves, production and income in respect of the Nichols Gas field will be issued once the field is completed.
Philip Thompson, chief executive officer of San Leon Energy commented:
San Leon Energy can now join the very short list of producing AiM listed oil and gas companies. Whilst the initial discovery in itself is not massive, the outcome of the further three wells will make it more interesting, nevertheless it will provide both welcome positive cashflow into the company and also valuable experience in running a producing field.
San Leon Energy has had a very successful early period. In just over eighteen months, we have created and improved a diverse and attractive portfolio of assets, listed on public markets, completed an international acquisition and now proved that we can successfully explore for and produce hydrocarbons.
We now move forward to our next stage of development with confidence.
