HOUSTON, Sept. 27 /PRNewswire-FirstCall/ -- Petrogen Corp.
(OTC Bulletin Board: PTGC) provided an operations update. In anticipation of
Hurricane Rita (Rita), natural gas production from the Emily Hawes #3A well
(EH#3A) on the Company's Emily Hawes Field property, Calhoun County, Texas,
was temporarily shut-in on Wednesday, September 20th as a precautionary
measure. Emily Hawes field is located on Matagorda Island, which is situated
on the Texas Gulf Coast. Matagorda Island and Emily Hawes Field sustained no
reported damages from Rita. Natural gas production and sales from the EH#3A
resumed on September 26th, 2005 and the Company anticipates that sales from
the well will be made at similar or higher prices to those received for gas
sales from the property prior to the shut-in as noted, previously reported to
range between $10.00 and $15.05 per Mcfg. Petrogen's natural gas from Emily
Hawes Field is sold into the Zone 1-FGT, which is currently paying at daily
pricing of $17.95 per Mcfg.
In preparation for Rita, Petrogen's management re-assessed its options
related to oncoming operational objectives. As reported in the Company's
September 14th, 2005 news release, Petrogen received input from three
independent compression services companies to analyze the Company's EH#3A well
data. High line pressures on the Northern Natural Gas/Matagorda Offshore
Pipeline System sales pipeline have resulted in suppressing optimum daily
natural gas flow rates from the EH#3A. Results from the analyses indicate that
production flows from the EH#3A can be increased to approximately 800 Mcfgd
with one stage of compression, doubling current average daily rates. Hanover
Compression Company of Houston, Texas has been contracted whereby crews will
be mobilized to Emily Hawes Field to continue implementation and completion of
the compression initiative on the EH#3A well as first reported. In its
assessment of the Company's current operational objectives, management has
shifted its focus for drilling plans on the EH#1A sidetrack well at Emily
Hawes Field as reported in the Company's September 15th, 2005 news release,
re-focusing its attention on developing its Tiller Ranch Field property, Jim
Wells County, Texas.
Petrogen plans to mobilize drilling crews to the Tiller Ranch Field and
commence operations on the Tiller #1 well, the first new well drill of up to
six potential new wells to be spudded at Tiller Ranch Field during Q4-05 and
Q1-06. New wells on Tiller Ranch Field will test multiple previously producing
pay sands in the Vicksburg and Frio formations. Due to the accelerated
scheduling, management believes that it may be able to spud as many as three
new wells at Tiller Ranch prior to year-end. Natural gas wells in the area
have average production histories of approximately eight to ten years with
cumulative production ranging from approximately 2.6 to 3.5 Bcfe per well.
Extensive subsurface control, provided by approximately twenty-five wells
located on or adjacent to the Tiller Ranch lease indicate that potentially up
to 18 Bcfe previously producing reserves are recoverable.
Petrogen's Chairman and CEO, Sacha H. Spindler stated "Petrogen's
operations have undertaken limited down-time from Rita and we are well
positioned to move on to Tiller Ranch Field at this time. We are extremely
excited about diversifying the Company's operations in the Texas Gulf Coast,
an area that we have built a platform of expertise and success upon to date."
Mr. Spindler added, "We anticipate results from Tiller Ranch Field that could
provide a substantial increase in economic benefit to the shareholders of the
Company in a much shorter time frame than initially anticipated due to the
accelerated development schedule that we've adopted for the property and the
viability of the prospect as a key contributor to the Company's near term
growth objectives."
Anticipated results from the potential success of the drilling plans at
Tiller Ranch Field could potentially increase Petrogen's daily production,
monthly revenues and producing reserves significantly over the coming two
quarters, which would substantially add to Petrogen's existing foundation of
current revenues from its Emily Hawes Field.
Tiller Ranch is located within the Tom Graham Field, Jim Wells County,
Texas, which has produced a total of thirteen billion cubic feet of natural
gas (13 BCFG) from twenty-five distinct sands. In addition, Tom Graham Field
has produced six million eight hundred thousand barrels of oil (6.8 MMBO) from
six pay sands. The majority of wells previously developed on the Tiller Ranch
Lease were drilled during the 1940's and 1950's when local natural gas prices
were in the 2 to 10 cent per Mcfg range. These extremely low gas prices
resulted in limited development of the natural gas reserves on the Lease,
providing for the substantial infill and step out drilling potential currently
anticipated from Tiller Ranch Field by the Company.
Mr. Spindler further stated, "All of us at Petrogen would like to convey
our deepest concern and regard for those families affected by the recent
hurricanes, and wish everyone a speedy recovery."
About Petrogen
Petrogen Corp. (PTGC.OB) is a Houston, Texas based up-stream energy
company specializing in the development of natural gas properties in the Texas
Gulf Coast region with known hydrocarbon reserves. For further information,
please visit the Company's website at http://www.petrogencorp.com.
THIS NEWS RELEASE MAY INCLUDE FORWARD-LOOKING STATEMENTS WITHIN THE
MEANING OF SECTION 27A OF THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED, AND SECTION 21E OF THE UNITED STATES SECURITIES AND EXCHANGE ACT OF
1934, AS AMENDED, WITH RESPECT TO ACHIEVING CORPORATE OBJECTIVES, DEVELOPING
ADDITIONAL PROJECT INTERESTS, THE COMPANY'S ANALYSIS OF OPPORTUNITIES IN THE
ACQUISITION AND DEVELOPMENT OF VARIOUS PROJECT INTERESTS AND CERTAIN OTHER
MATTERS. THESE STATEMENTS ARE MADE UNDER THE "SAFE HARBOR" PROVISIONS OF THE
UNITED STATES PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND INVOLVE
RISKS AND UNCERTAINTIES WHICH COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY
FROM THOSE IN THE FORWARD-LOOKING STATEMENTS CONTAINED HEREIN.
CONTACTS:
Company Contact Investor Relations Contact
Louis J. Fruchier Barry Gross
V.P. Corporate Development & Communications President
Petrogen Corp. Gross Capital, Inc.
888-875-1155 361-949-4999
fruchier@petrogencorp.com barry@grosscapital.com
SOURCE Petrogen Corp.
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Related links:
http://www.petrogencorp.com
CONTACT:
Company, Louis J. Fruchier, V.P. Corporate
Development & Communications of Petrogen Corp., +888-875-1155,
fruchier@petrogencorp.com; Investor Relations, Barry Gross,
President of Gross Capital, Inc. +1-361-949-4999,
barry@grosscapital.com
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