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Tandem Operations Update
Wednesday September 7, 9:00 am ET
MIDLAND, Texas--(BUSINESS WIRE)--Sept. 7, 2005--Tandem Energy Holdings Inc. (OTC:TDYH - News; the "Company") today announced that current net daily production is approximately 625 barrels of oil and 2,600 Mcf of natural gas. This would approximate 1,058 barrels of oil equivalent each day. Below is a summary of significant operations by area.
IRA UNIT, Scurry County, Texas -- The Company has drilled and is currently completing the first well of a seven well pilot drilling program targeting the San Andres formation at 1,850 feet. The initial well is producing 20 gross barrels of oil per day and 55 barrels of water. A planned fracture stimulation should further enhance production capabilities. The Ira Unit consists of almost 3,600 acres, wherein the Company is utilizing its own drilling and completion rigs.
BALL LEASE, Palo Pinto County, Texas -- The Company has recently performed several workovers which have increased gross gas production by approximately 350 Mcf per day since the property's purchase in March, 2005. The Company has also staked four new drill locations that will target natural gas in several formations, the deepest of which is the Barnett Shale at 3,800 feet. The Company's leasehold position in Palo Pinto County consists of approximately 4,900 acres.
MONTGOMERY COUNTY, Kansas -- As earlier reported, the Company has drilled and completed two coal bed methane (CBM) wells at 1,400 feet. The initial gas production rates from these wells have been disappointing and appear to be marginally economic to produce. At this time, the company is re-evaluating its CBM potential and will either drill several more tests on existing leasehold or divest the properties.
TOMBALL LEASE, Harris County, Texas -- The Company has completed production modifications and a single workover which have resulted in a gross 40 barrels of oil per day increase since the field was purchased by the Company in March, 2005. Within the field, the Company has identified as many as three proved undeveloped locations in the Upper Wilcox formation at a depth of approximately 9,000 feet. The Company may decide to find an industry partner to share the risk and the cost to drill these wells. The timing of the drilling will depend on the selection of a partner and the availability of drilling equipment.
Shortages of drilling rigs, equipment, supplies or personnel may increase drilling costs and may delay or restrict drilling and workover operations. In order to mitigate these conditions, the Company has formed a new wholly owned drilling subsidiary, Mixon Drilling Company (Mixon), which will own and operate two drilling rigs for the Company. Currently, the Company owns a rig capable of drilling 4,500 feet, which is drilling on the Ira Unit, and a definitive agreement has been signed to purchase a second rig which should be drilling on the Ball lease late in the third quarter. The purchase of this second rig, capable of drilling 6,000 feet, should occur late this week. Both of the rig purchases are being funded out of cash flow. When Mixon is not drilling for the Company, the rigs may be made available to other operators at rates commensurate with industry standards.
The Company has experienced no production or delivery disruptions due to hurricane Katrina. In an effort to do our small part, the Company has contributed $10,000 through the Permian Basin Petroleum Association to aid in the ongoing recovery efforts along the Gulf coast.
Forward-Looking Statements:
Statements about the company's future expectations, including future revenues and earnings, and all other statements in this press release other than historical facts are "forward-looking statements" within the meaning of section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act 1934, and as the term is defined in the Private Litigation Reform Act of 1995. The Company's actual results could differ materially from expected results. The Company undertakes no obligation to update forward-looking statements to reflect subsequently occurring events or circumstances. Should events occur which materially affect any comments made within this press release, the Company will appropriately inform the public.
Contact:
Tandem Energy Holdings Inc., Midland
Mickey Cunningham, 432-686-7136 |
