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Pryme grabs prospective US acreage


Friday, July 07, 2006

UNITED States-focused Pryme Oil and Gas has increased its interest in the producing LaSalle Parish Project in Louisiana – boosting its projected cash flow by about 50% before an extensive exploration program later this year.



The Boot Hill lease in Pryme's LaSalle Parish acreage

Brisbane-based Pryme also says an independent study of reserves and deliverability has confirmed estimates made earlier this year when it acquired a 10% stake in LaSalle Parish, one of the company's three main focus areas.

Pryme yesterday said it had purchased additional LaSalle stakes from Miami-based Anglo Energy for a consideration of 2.67 million fully-paid Pryme shares.

LaSalle comprises 22 producing oil wells, including several with "stacked" oil formations that have not yet been developed, six water disposal wells and associated facilities. The project is spread across six separate fields with leases covering an area of about 1125 acres (455 hectares).

The new total interests, by field, are Routh Point 13%, Shirley Estate 12.4%, Northwest Rogers 21.5%, Boot Hill 20.2%, Ward 8.25% (no change), and La Pacific Ray 8% (no change).

"This additional interest in the LaSalle project should increase Pryme's current net cash flows by about 50% and is a significant complement to our exploration projects," Pryme chief executive Justin Pettett said.

"We believe the fact that we have been able to establish Pryme in a solid cashflow-positive project prior to drilling our exploration projects is an extremely prudent strategy."

Today Pryme said the independent study, which included all of Pryme's new aggregate interests on a current basis, showed gross proved and probable (2P) reserves at LaSalle of 2.9 million barrels, with and 320,717 bbl net to Pryme.

This equated to an in-ground purchase price of $US15.62 per barrel to Pryme.

"We're delighted with the outcome of the report which shows the robustness of the LaSalle Parish project going forward. LaSalle provides a solid platform for Pryme as the company advances its exciting suite of exploration projects in the US," Pettett said.

Houston firm R.A. Lenser & Associates wrote the report and the study was made according to the "Deterministic" method, the only one approved by the US Securities & Exchange Commission.

The LaSalle project is about 20 miles (32km) northeast of Alexandria, Louisiana in a geological area known as the "LaSalle Arch", which was productive for oil from the Eocene-aged Wilcox sands. The Wilcox sands in the area were characterised by prolific, long-life oil production.

Last week, Pryme increased its total working interest in a south-central Louisiana 3D seismic project to 52% by purchasing an additional 12%, again from Anglo Energy, for a consideration of 1.18 million fully-paid Pryme shares.