TransAmerican Energy Plans Deep Well Reentry in Morton Field
April 20, 2006, Vancouver, British Columbia, TransAmerican Energy Inc. (TSX Venture: TAE) is pleased to announce that it is now preparing the location at Rogers Estate 10-4 #1 well in Morton Field, Scott County, Mississippi for a drilling rig.
TransAmerican plans to reenter this well and drill out cement plugs that had been placed at the surface and at 14,300 feet in 1976. Subsequently, the isolating packer at 14,339 feet will be removed, the well is to be reperforated and then a test of the first perforated zone will again be conducted. The company also plans to run a new sophisticated cased hole log to evaluate several other zones in the well that appear productive.
TransAmerican's geologist and engineers have studied the production logs on this well, and are of the consensus that the first set of perforations in 1976 did not deplete the reservoir; that the first and second perforations appear to be separated by a permeability barrier and that the first set of perforations were abandoned prematurely in 1981 when oil prices exceeded an all-time high of $23.00 per barrel (adjusted for inflation equaling $32.00 in today’s dollars), after which oil prices spiraled on a continuous decline through 1986 reaching a price per barrel of approximately $10.00 ($18.00 adjusted for today’s pricing). Over the five-year period that this well was operational, it produced 77,308 barrels of oil, until it was finally shut-in in 1981.
Our production personnel believe that there is an excellent chance to restore significant production in the original producing interval by reperforating, utilizing up to date perforating tools, which can penetrate 48-60 inches into a formation whereas the perforating tools in 1976 only penetrated 6 to 8 inches.
The estimated costs to reenter this well to 14,400 ft are approximately $250,000. To drill and case a new well to this depth today would cost approximately $3,000,000. Cash flow from existing producing properties will be utilized to fund this reentry program.
Third quarter financial results posted April 3, 2006, show that revenue from producing properties has been steadily increasing, and it is Management’s objective to continue to seek and develop potential revenue producing properties utilizing the cash flow from the initial successful property acquisitions.
Please visit the Company’s updated website at www.TransAmericanEnergy.com.
CONTACT:
TransAmerican Energy Inc.
Ron Hughes, President
Toll Free: 1-888-945-5056
[email protected]
The TSX Venture Exchange has not reviewed and does not accept responsibility
for the adequacy or accuracy of this News Release.
