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North Franklin Gas Production From "Archer-Whitney #1" Well Begins Tuesday March 22, 9:00 am ET
LOS ANGELES, CA--(MARKET WIRE)--Mar 22, 2005 -- Silver Star Energy, Inc. (OTC BB:SVSE.OB - News) is pleased to report that natural gas production has begun from the "Archer-Whitney #1" gas well. The operator of the North Franklin Project informed the Company that the well was put on production and began flowing gas into the gas buyers system. A gas sales contract is in place with a natural gas purchaser and Silver Star will begin to receive revenue as of today's date.
The operator of the project has choked down and metered the flow at an initial rate of 2.0MMcf and will be increasing the flow in small increments until the pressures from the reservoir stabilize at an acceptable rate that will not damage the casing or productive sand layer. It is critical for the field health to inhibit a simple open flow and to choke down pressures to prevent gas reservoir "coning" and drawing water into the sands by the outgoing gas.
The Company will endeavor to release further gas flow rates from the well as soon as numbers become available. The gas well will now be evaluated as to I.P.R.s (Initial Production Rates) and flow rates will be established as to the performance of the well and response of the reservoir.
The Company has always expected excellent deliverability from the well and is optimistic that ultimately, gas flow rates will be similar to area analog gas fields and that 5,000 mcf/day is a realistic flow rate target. The production rate will now be evaluated and assessed by the Company, partners and operator as to optimal numbers for the well and reservoir.
Robert McIntosh, President of Silver Star, stated, "The inaugural production at North Franklin is a tremendous accomplishment for the Company. Now that the well is finally online it comes at a time when gas prices continue to rise due to high demand and Silver Star is positioned to take advantage of these natural gas prices. The Company has plans for drilling 5 more wells on the leases and the second well is scheduled to begin drilling immediately on the lease when the conditions allow us to mobilize drilling equipment."
Monday's gas price based on PG&E-Citygate pricing is $7.19 mc
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