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ASX:EMR) has started its commercial gas production from the first
two of eight wells in Magoffin County, Kentucky, USA.
This is a significant first step in its plans to establish a
significant gas production position from its Appalachian gas assets in
2009.
These are the first two of eight wells, which include six wells
purchased by Emerald in 2008 and two additional wells recently acquired
from P&J Resources.
In all cases an 80 per cent working interest is earned by
completing the wells with production casing and fracture stimulation
treatments.
No initial well purchase was required for the two additional
wells.
Gas rates from the two producing wells is being gradually
increased for production.
This will be followed by up to three more wells in April and the
remaining three wells by end Q209.
All the wells are tied into a gathering system that links to the
Jefferson Energy pipeline.
Gas prices will range from 80pc to 90pc of the Appalachian Index
price, which is at a premium to the Henry Hub price.
ENDS