I started looking into this stock when the San Jacinto prospect started drilling in Texas. Anyway their project at Lake Catahoula looks interesting, in regards to it being a decent earner for little effort. It is unfortunate that the operator went bankrupt last year. FUT's partner in PLX released their annual report last week, and it gives some indication of what the partners are planning for the second quarter 2011.
From the below excerpts the plan for this year is to increase flow rates from existing wells and drill 1-2 new wells. Plus work on expanding the resource, and work towards a more extensive drilling campaign in 2012. The below mentions that they will be using a land based rig, so I presume the barge will be occupied performing the workovers of the existing wells?? But that is only speculation on my part, as it does not state anywhere what the barge is doing.
So I do detect some life in this stock over the next 18 months :)
Pryme Oil & Gas - Annual Report to shareholders 18 March 2011
excerpt from page 6 - statement from Managing Director:
Catahoula Lake Catahoula Lake is approximately 30,000 acres in area and, because of the need for specialised exploration equipment, is relatively unexplored. Pryme Lake Exploration (PLX) which is 50% owned by Pryme, holds various working interests, ranging from 50% through to 100%, in acreage located within Catahoula Lake and its surrounds. In addition, PLX has an interest in the only equipment available to drill and service wells on Catahoula Lake. This provides Pryme with a significant competitive advantage over other explorers over the entire area of the lake almost all of which is prospective.
In May 2010, PLX purchased the Lamar property in Catahoula Lake. The Lamar assets comprised 5 wells, 3 of which were producing, along with extensive pipeline and header systems on the lake feeding a large onshore production facility.
During 2010, PLX took control of the Catahoula Lake operations following the bankruptcy of the project's operator, Axis Onshore. We successfully refurbished the barge drilling rig and drilled the State Lease 502 No.1 well on PLX 100% held acreage. This well was a success and was put into production quickly due to the extensive production infrastructure which PLX owns.
The 2011 program for Catahoula Lake includes the workover of existing wells on the lake and the drilling of a new prospect using a land based rig. The program has the potential to more than double current oil production levels, to over 100 Bbls/day (gross), and to add valuable reserves to the bottom line for a very low investment.
A full geological review of the lake is expected to be undertaken during 2011 in readiness for the drilling season in 2012. This will define the scope of the project and enable the prioritisation of 2012 exploration targets.
Excerpt from page 9 - Production & Projects:
Catahoula Lake Project (Pryme: 25% Interest / 20.25% NRI) The Catahoula Lake project is located in LaSalle, Rapides, and Grant parishes, Louisiana and is targeting multiple "stacked" oil zones throughout the Middle-Wilcox formation at depths ranging from 4,500 to 5,500 feet. Wells drilled in the Middle-Wilcox exhibit long production lives with low decline rates after the initial flush oil is produced and relatively steady production is established. Ultimate oil recoveries are expected to range from 50,000 to 200,000 barrels for each successful well drilled from land locations and in excess of 250,000 barrels for each successful well drilled from lake locations.
Pryme Oil and Gas Limited and Future Corporation Australia Limited each own 50% of Pryme Lake Exploration (PLX) which is a participant in the Catahoula Lake joint venture and also owns, in its own right, a 100% WI in wells, production facilities and acreage located within Catahoula Lake and its surrounds.
Sales for the year were 5,293 barrels of oil net to Pryme, an average of 15Bbls/day for the year.
The State Lease 502 No.1 well (PLX 100% WI) was drilled by PLX during the year. The well was a success and is currently producing oil at 20 Bbls/day.
Active exploration of the joint venture interests on the lake was impeded during 2010 by the bankruptcy of PLX?s partner and project operator, Tridimension Energy.
On 18 October 2010 an Asset Purchase Agreement was lodged with the United States Bankruptcy Court for the sale of Tridimension's oil and gas assets to a Houston based private oil and gas company, Sanchez Oil and Gas Corporation (Sanchez). The closing of the sale to Sanchez was effective 1 November 2010. Sanchez has now taken the position in the joint venture which was formerly occupied by Tridemension. Pryme looks forward to working closely with Sanchez on the further development of Catahoula Lake.
The Company has reviewed the potential benefits from working over operating wells within the PLX 100% owned tenements in Catahoula Lake and expects that the workover of up to three wells should result in a significant increase in production for little outlay. Therefore, subject to weather or other events limiting access to the wells, PLX intends to work-over three wells during the second quarter of 2011. The Company is also anticipating the drilling of one or two new wells later in the year on PLX 100% owned tenements.
Pryme Energy LLC, the wholly owned subsidiary and operating arm of Pryme Oil and Gas Inc., is the operator of PLX 100% owned leases on Catahoula Lake.
END
FUT Price at posting:
2.0¢ Sentiment: Hold Disclosure: Held
