jack hamar gas moving to commercial production

Jack Hamar Gas Moving to Commercial Production
Orchard Petroleum Limited (ASX; OPL) (Orchard) and Orchard Petroleum Inc. (OP Inc), a
wholly owned subsidiary of Orchard, are pleased to provide an update on current on-going
testing operations at the Southeast Lost Hills (Jack Hamar) project in California.
Orchard is pleased to announce that further testing at the Jack Hamar 2-13 well has yielded
improved production rates, which has lead to a decision to fast track development of the field.
During a 5 hour test on 25 May the Jack Hamar 2-13 flowed at a rate of around 1.4 million cubic
feet of gas per day on a 12/64 choke. This gas flow was from one shallow zone that has been
encountered in all wells drilled to date, and represents just one of the many potential gas bearing
zones in the well/field. With the five wells drilled on the structure to date, and now a successful
production test, the partners have decided to develop the field.
The Jack Hamar 2-13 well has now been “shut in” awaiting construction of a gas sales line,
which is currently being permitted. According to the Operator, it is anticipated that a “hook up”
date and commercial production will begin in August 2005, at which time the remaining wells
will be completed and tied into production facilities.
The Operator estimates the field deliverability from existing wells will exceed 6.0 million cubic
feet of gas per day. More wells will be drilled into the field once production has commenced. At
this early stage, the Operator has not made any announcement on reserves. More delineation
drilling combined with further testing and production data will be used to make more definitive
reserve comments at a later date.
Orchard’s joint venture partner, Nuenco has stated in a previous stock exchange release that it
believes reserves are in the broad range of 20-100 billion cubic feet.
Participants are:
NEG (Operator) 25%
Orchard Petroleum 37.5%
Nuenco NL 37.5%
Comments
The successful production test at Jack Hamar, combined with the five wells drilled to date
provide encouragement that a significant gas resource has been discovered, hence the decision to
move to commercial development. The lead time from discovery to production will have taken
Orchard Petroleum Limited
ABN 25 061 655 463
less than twelve months which underscores the value of making discoveries in an area with
established infrastructure and a ready market for gas.
This discovery and subsequent development represents an important event in the corporate
evolution of Orchard. The Jack Hamar gas project combined with other developments at South
East Lost Hills (Deep Monterey Oil), South Belridge (Sledge Hamar Oil) and the Forbes Gas
project in the Sacramento Basin will provide the increased cash flow to fund other exciting
exploration projects that the company has put in place.
For further information please contact Mr Steve Graves on 0011 1805 469 4656.
The geological information included in this announcement is based on information
provided by Mr Edward Duncan, a qualified geologist employed as a technical consultant
to the Company. Mr Duncan has practiced as a geologist in the petroleum industry for
over 20 years. Mr Duncan has consented to the inclusion of the geological information in
this announcement in the form and context in which it appears.