annual report

prospective Austin Chalk formation leasehold for Pryme and
its partners. Both wells are candidates for future workovers
which have the potential to significantly increase production.
\In recent years it has been difficult for junior resource
companies to raise substantial project development capital.
The company successfully met this challenge for the Turner
Bayou Chalk project with the establishment of a US$100
million debt facility which has recourse only to the project.
Pryme’s share of development costs for the Rosewood
Plantation 21H No.1 was financed through the first tranche
of this facility. The availability of the second tranche, which
is earmarked for the drilling of the next and subsequent
Turner Bayou Chalk wells, is at the option of the lender.
In addition to the development funding for the Turner
Bayou project, the company has also raised A$2.3 million
for working capital by way of several private placements.
The continued support of shareholders has been very
encouraging as we move towards realization of the potential
value of Turner Bayou.
Whilst the Turner Bayou Chalk project is a potential
“company maker” for Pryme, Pryme’s Turner Bayou
leasehold also offers very attractive exploration potential
from both the Wilcox and the Tuscaloosa Marine Shale
formations which, respectively, lie above and below the
Austin Chalk formation. The Tuscaloosa Marine Shale is
analogous to the prolific Eagle Ford Shale in south Texas
which has attracted significant exploration and production
interest from major US oil companies.
\
\We are looking forward to a rewarding year and greatly
appreciate the continued support of shareholders, staff,
joint venture partners and suppliers.
George Lloyd
Chairman

Rosewood Plantation 21H (61.53% WI . 46.15% NRI)
We now propose to shut the well in and monitor the pressure
build up towards the original reservoir pressure. We will
use the pressure data as a basis for establishing the next
steps towards improving the performance of the well and
establishing a stable rate of production. Such steps may
include mechanical intervention such as nitrogen jetting
the heavy fluids out of the well bore or acid treatment.
On completion of the pressure build up and analysis, and
prior to any mechanical procedure to clean out the well
is attempted, we intend to connect the well to production
facilities, which are currently under construction, and sell
oil and natural gas while monitoring the well’s performance
over a further 30-60 days.
At the time of writing the well has produced approximately
2,400 barrels of oil with the natural gas being flared.
The production unit containing the Rosewood Plantation 21H
well (approximately 1,200 acres) is now held by production