Thursday, May 26, 2011
Neon Energy Ltd.
Neon announced the successful completion of the Lombardi 20-27H and Lombardi 21-27H horizontal development wells at its 100% owned North San Ardo field, onshore California. Both wells targeted the southern lobe of the field, infilling the existing well pattern with 1,000 foot horizontal sections within the oil column.
The wells, which were completed and brought on stream within a two week period, are currently producing at rates of 200 bopd (well 20-27H) and 500 bopd (well 21-27H) respectively. At the time of writing total North San Ardo field output has surpassed the 1000 bopd level.
The total capital cost for both wells was approximately US $1.3 million, and at current rates of production and oil prices Neon expects to achieve payback in less than one month.
The Company plans to proceed with a facilities upgrade to enable the handling of a sustained higher level of production. Additional development drilling is planned within the next two months, and the Company is also preparing to drill a near-field exploration well at the Lombardi East prospect, to the northeast of the main field.
Neon's Managing Director Ken Charsinsky commented, "We remain committed to maximizing value at our North San Ardo asset, and are encouraged by the ongoing success achieved with the recent drilling campaign. While initial production rates will decline, often rapidly, the increase in production to this milestone level will have a material effect upon the Company's cash flow given the current sustained high oil price."
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