www.elixirpetroleum.com
Elixir Petroleum is an international exploration and production company listed on the Australian Stock Exchange (ASX:EXR). Elixir holds interests in producing gas and condensate fields located in the Gulf of Mexico and has extensive interests in exploration and appraisal licences in the UK North Sea. Elixir has recently acquired interests in two producing fields in the Gulf of Mexico which provide the group with cashflow from sales of gas and condensate. The company is focused on increasing its presence on the shallow water shelf of the Gulf of Mexico and continues to examine new projects in which to participate. Such projects typically display discovered reserves, nearby infrastructure and short cycle times to first production and cashflow.
Elixir Petroleum hit by disappointing Pompano Project Update
Elixir Petroleum, the ASX and AIM listed oil and gas exploration and production company with interests in the Gulf of Mexico, UK North Sea and Offshore Sierra Leone, weakened this morning after the company reported disappointing results from the Pompano Gas Project .
Elixir’s update was twofold. First, it reported that Well 3 on the Pompano Project, which is targeting multiple gas sands, had encountered productive gas with a total net pay of 12 feet from the ‘6700 feet Sand”. However, the B, C and E Sand were ‘water wet’. The operator, AnaTexas Offshore has shut in the well, while drilling and logging data is collected, before a decision is made on whether to complete the 6700 feet Sand, or to continue drilling a sidetrack to additional targets.
Meanwhile at Well 1, Elixir announced that the well has “recently experienced declining production rates”. The lower productivity is due to a poor cement job between the B Sand and B-2 Sand which is allowing water “to dominate flow”. Elixir said the well was now shut in, awaiting a work over rig that will attempt to restore production back to ‘pre-decline’ levels of 6-7 million cubic feet per day.
The combination of weakening oil prices and the Pompano Gas Project update hit Elixir Petroleum hard today; however the company finds itself in a better position than most of its peers thanks to a healthy cash balance. At the end of June, 2008, Elixir reported cash balances of approximately £4.1 million (A$10.6 million) versus a market capitalisation today of just £5.2 million.
