Magellan Petroleum Announces Production and Exploration Activities for the Quarter Ended September 30, 2009
PORTLAND, Maine, Nov. 10 /PRNewswire-FirstCall/ -- Magellan Petroleum Corporation (Nasdaq: MPET; ASX: MGN) ("Magellan") announced its production and exploration activities for the quarter ended September 30, 2009.
OIL & GAS SALES
Natural Gas
The Company's share of natural gas sales during the quarter ended September 30, 2009 decreased by 13 percent from the September 2008 quarter, as detailed below:
Field (Magellan Share) Million Cubic Feet Terajoules Variance
Total Daily
Mereenie 1,036 11 1,211 -15%
Palm Valley 333 4 379 -10%
Total Gas 1,369 15 1,590 -14%
Crude Oil and Condensate
The Company's share of crude oil and condensate sales during the quarter ended September 30, 2009 decreased by 0.4 percent from the September 2008 quarter, as detailed below:
Fields (Magellan Share) Barrels Kilolitres Variance
Total Daily
Mereenie 31,959 348 5,081 18%
Nockatunga 15,481 168 2,461 -22%
Kiana 576 6 92 -23%
Aldinga - - - -100%
Total Crude Oil and Condensate 48,016 522 7,634 -0.4%
PRODUCTION AND DEVELOPMENT ACTIVITIES
AUSTRALIAN PRODUCTION
Palm Valley Gas Field (PL 3) - Amadeus Basin NT (52.023% Interest)
The Palm Valley gas field which is operated by Magellan produced an average of approximately 7.2 million cubic feet per day (MMcf/D) of natural gas for sale during the quarter. The Palm Valley Joint Venture's objective is to maximize gas production from the existing facilities while maintaining a safe and efficient operation, conducted in accordance with good oil field practice.
Mereenie Oil and Gas Field (PL 4 & 5) - Amadeus Basin NT (35% Interest)
The Mereenie oil and gas field which is operated by Santos Ltd produced an average of approximately 32 MMcf/D of natural gas and 633 barrels of oil and condensate per day for sale during the September quarter.
Nockatunga Oil Fields (PLs 33, 50, 51, 244, 245 & ATP 276P) - Cooper Basin Qld (40.936% Interest)
The Nockatunga oil fields which are operated by Santos Ltd produced an average of approximately 431 barrels of oil per day (BOPD) during the September quarter.
Processing of data acquired by the Maxwell-Kaos 3D seismic survey during the previous period is in progress. The 254 square kilometre survey covered PL 50 & PL 245 over the Maxwell field and Noccundra lease as well as a significant portion of the ATP-267-P exploration block.
Kiana Oil Field (PPL 212) - Cooper Basin SA (30% Interest)
Production from the Kiana-1 well averaged 21 BOPD during the quarter. The well produces from both the upper and lower Patchawarra Formation zones.
Aldinga Oil Field (PPL 210) - Cooper Basin SA (50% Interest)
Aldinga-1 well has remained shut-in during the period, waiting on repairs. There are no current plans to develop the field further.
CANADIAN PRODUCTION
Kotaneelee Gas Field, YT (2.67% interest)
Magellan has a 2.67% carried interest in the Kotaneelee gas field in the Yukon Territory of Canada. Devon Canada Corporation is operator of this partially developed field which is connected to a major pipeline system.
EXPLORATION ACTIVITIES
AUSTRALIAN EXPLORATION
Exploration evaluation of ATP 267P (Magellan 40.936% - refer above), PEL 94 (Magellan 35% interest), PEL 95 (Magellan 50% interest), PEL 107 (Magellan 20% interest) and PEL 110 (Magellan 60% interest) in the Cooper Basin of Queensland and South Australia is ongoing.
The Company entered into native title agreements with the State of Queensland and the Boonthamurra People native title claimants in relation to the grant of ATP 732P in the Cooper Basin of Southwest Queensland. The grant of the ATP by the Minister for the Environment and Resource Management is awaited.
During the Quarter, Magellan initiated a round of bidding from selected companies to sell its Cooper Basin exploration and production operations, and will undertake further discussions with potential buyers targeting a series of potential sales transactions.
In ATP 613P, ATP Application 674P and ATP Application 733P in the Maryborough Basin of Queensland, evaluation of the coal seam gas potential of the Burrum Coal is being undertaken by Blue Energy. Work on the tenements is delayed pending completion of current native title negotiations relating to the grant of the two ATPs.
UNITED KINGDOM EXPLORATION
In the Weald Basin, Magellan (40% interest) will participate in the Markwells Wood-1 exploration well in PEDL 126 and the Havant-1 well in PEDL 155. Both wells are now scheduled to be drilled in the first quarter of 2010. The Markwells Wood well was delayed so that the two wells can be drilled back to back, giving cost savings on the drilling program.
Northern Petroleum, operator of the PEDL 126 Joint Venture, has completed site construction for the Markwells Wood-1 well which will target a prospect that is interpreted to be an eastward extension of the Horndean oil field which is currently producing from the Great Oolite Formation. Northern Petroleum, also operator of the PEDL 155 Joint Venture (Magellan 40%), commenced site construction for the Havant-1 well in mid-October. The Havant prospect which lies to the south of the Horndean oil field will also target oil in the Great Oolite Formation.
Magellan holds interests (ranging from 22.5% to 50%) in five other exploration licences in the Weald-Wessex Basin (PEDLs 098, 125, 153, 154, and 240), which are also operated by Northern Petroleum. PEDL 152 on the Isle of Wight adjacent to PEDL 098 was considered not to be prospective and was allowed to expire at the end of September. Magellan also holds 50% interest in PEDLs 231, 232, 234 and 243 in the central Weald Basin area which will be operated by Celtique Energie Petroleum with a 50% interest.
Elsewhere in the Weald Basin, PEDLs 135, 136, 137, 242 and 246 are held and operated by Magellan with a 100% interest. Well sites have been selected and applications for local council planning consents for the drilling of two prospects, one in PEDL 135 and one in PEDL 137 are being progressed.
EXPENDITURES
Expenditures incurred on exploration, appraisal and development activities during the September 2009 quarter, totalled US$1,106,000. All figures are unaudited.
Forward- Looking Statements
Statements in this release which are not historical in nature are intended to be, and are hereby identified as, forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. These statements about Magellan and MPAL may relate to their businesses and prospects, revenues, expenses, operating cash flows, and other matters that involve a number of uncertainties that may cause actual results to differ materially from expectations. Among these risks and uncertainties are pricing and production levels from the properties in which Magellan and MPAL have interests, the extent of the recoverable reserves at those properties, the future outcome of the negotiations for gas sales contracts for the remaining uncontracted reserves at both the Mereenie and Palm Valley gas fields in the Amadeus Basin, including the likelihood of success of other potential suppliers of gas to the current customers of Mereenie and Palm Valley production. In addition, MPAL has a large number of exploration permits and faces the risk that any wells drilled may fail to encounter hydrocarbons in commercially recoverable quantities. Any forward-looking information provided in this release should be considered with these factors in mind. Magellan assumes no obligation to update any forward-looking statements contained in this release, whether as a result of new information, future events or otherwise.
SOURCE Magellan Petroleum Corporation
Released November 10, 2009