News: Iona Energy Sets New Production Level and Builds Interest in Huntington Development Core
CALGARY, ALBERTA--(Marketwired - May 23, 2013) -
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Iona Energy Inc. ("Iona" or the "Company") (TSX VENTURE:INA) is pleased to announce an operational update for its Huntington and Trent & Tyne producing fields, to which Iona has a 15% working plus 2.55% royalty interest and 20% working interest, respectively. On May 14th, 2013 the Company produced a new record production level of approximately 2,960 boepd, which is expected to increase in the coming weeks to approximately 4600 boepd and reach a new production threshold of 7,500 boepd by the end of June, based on the anticipated increase of the Company's working interest in Trent & Tyne from 20% to 37.5% and the anticipated increase in Huntington production to maximum capacity (4,500 bbls/d of oil and 4.0 MMcf/d of natural gas, both net to Iona) as described below.
At the Huntington field, the Company has been informed by the Operator that production, which commenced Friday April 12th, 2013, has reached a rate of 7,625 bbls/d. Production is expected to increase to the predetermined Floating Production Storage and Offloading unit (FPSO) capacity of 30,000 bbls/d of oil and 27 MMcf/d of natural gas once the gas compression systems have been commissioned, which is scheduled to occur shortly. Once the gas compression has been initiated, production should ramp up to full capacity during June.
Production at Huntington is lifted in approximately 200,000 barrel increments, and the first shipment occurred on May 16th, 2013. Huntington produces 43º API light oil, which yields a premium to Brent, and Iona estimates current operating costs to be USD$15/boe.
Iona engaged Gaffney, Cline & Associates Ltd. ("GCA") to prepare an independent reserves evaluation of the Huntington Field and expects to provide their findings shortly. The Huntington Oil Field has discoveries made in three horizons, the Paleocene Forties formati
At this time, reserves will only be assigned to the Paleocene Forties formation, which has been developed through four production and two water-injection wells to achieve the aforementioned capacity figures. Huntington discovery well 22/14b-5 drilled by a previous operator tested at peak rates of up to 4600 bbls/d and 1.6 MMcf/d from the Fulmar sand, suggesting that development of this reservoir could extend the economic life of Huntington. Iona is considering joint venture appraisal drilling of the adjacent Fulmar compartment. Additionally, work is ongoing to evaluate the recoverable resources within the Jurassic Fulmar and Triassic Skagerrak oil-bearing intervals which Iona believe could be significant if tied back to the Huntington production facility. Iona will provide a further update once the results of this evaluation are completed.
The working interests in the Huntington field are E.ON Ruhrgas UK E&P (25% Operator), Premier Oil plc (40%), Norwegian Energy Company ASA (20%), and Iona (15%). In addition to the working interest, Iona holds a gross overriding royalty of 2.55% of the total Huntington production, payable from the Huntington Joint Venture Partners.
The Company is also pleased to announce that it has entered into a binding Sales and Purchase Agreement for the acquisition of a 100% working interest in part of UKCS block 22/14d from Carrizo Oil & Gas, Inc., and is awaiting final completion pending formal regulatory approval from the UK DECC.
Block 22/14d is located in the Central North Sea, immediately to the south of Block 22/14b, containing the Huntington Palaeocene oil field, the Jurassic Fulmar, and the Triassic Skagerrak discoveries in which Iona has a 15% stake.
As described above, and based on 3D seismic mapping, Iona has identified two undrilled Fulmar appraisal targets to the south of the Huntington Area, one within 22/14b (Iona 15%), and one within the newly acquired block (Iona 100%).