OFFICIAL MERIDIAN PETROLEUM WEBSITE

23.12.2004 oilbarrel.com
Meridian Studying Options For Calvin Production
Meridian Petroleum, the AIM-quoted exploration and development company which operates in the US and Australia, is still working on plans to produce from the Sligo-Pettet reservoir in the Calvin field in Louisiana. Work on the field had been delayed by downhole mechanical problems and the inevitable equipment shortages that are now a common feature of the booming North American resource market.

Meridian has commissioned a study to look at the best way of optimizing production flows from the well after a test of the upper zone of the Sligo-Pettet produced 0.175 million cubic feet of gas per day. However, salt water was found to have flowed into the well bore in the lower part of the reservoir. An independent engineering study suggests a horizontal completion across the zone could increase flow rates by up to 40 per cent and that an initial flow rate in excess of 0.6 million cubic feet per day may be possible. The Rodessa reservoir was found to be wet and unlikely to be commercially viable.

Meridian’s chief executive Tony Mason said he was “content” with the results from Calvin’s Sligo-Pettet reservoir. “We are putting plans in place to produce from this important asset,” said Mason. “The potential from Sligo-Pettet will allow us to build on our active exploration programme.”

The company hopes to get its Calvin reserves onstream shortly. With oil and gas prices in North America still riding high, any additional barrels that can be hooked up will quickly turn profitable for the London start-up, which raised £2.3 million when it listed on London’s Alternative Investment Market this summer.

Once onstream, the Calvin flows will complement Meridian’s existing production from the Emery Hudson well in Michigan.

The well, which is drilled into the Michigan Reef Trend, flows both gas and condensate at a rate of between 1.2 and 1.5 million cubic feet per day. Meridian hopes to beef up these numbers in January when it plans to perforate the upper zone of the well bore, which contains significant porosity, for 120 feet, of between 6 and 9 per cent.

Meridian also plans to sink another well on the 100 acre reef and is studying the 3D-data of the area to determine possible well locations. Meridian holds a 50 per cent working interest (38.25 per cent net revenue interest) in the Emery Hudson field.

Two thousand five is already shaping up to be a busy year for Meridian. Drilling operations at Brighton36 and Milford36 in Michigan and Middleton Creek in Mississippi are due to get underway in the second quarter. The company will be hoping the Michigan and Mississippi results in 2005 will eclipse the disappointment of the wells drilled at West Levees Creek in Mississippi and Lyon22 in Michigan, which failed to find commercial quantities of hydrocarbons.

Meridian’s strategy is to extract early cash flows from its portfolio of onshore properties in the US to fund potentially higher return exploration in Australia, where it holds interests in Victoria and South Australia. In October, the company increased its equity in PEL 82 to 100 per cent, in a move that Mason described as a real milestone for the company. This licence lies within the onshore Otway and Gippsland basins and is thought to hold 2P reserves of 125 billion cubic feet of gas, with the main prospect lying within 25 km of the Moomba to Adelaide pipeline, which connects into the populated markets of southeast Australia. Owning 100 per cent of the equity gives Meridian control of the pace and cost of the exploration and development programme.

Meridian hopes to make some real headway in Australia in 2005. The company is in the final stages of completing the native title clearance process and its lawyers believe this should be finalized in March 2005.