Acom A-6
Ignis has 25% of the working interest, which is equal to an 18.75% net revenue interest, in the Acom A-6 prospect, located in Chambers County, Texas. Kerr-McGee Oil & Gas Onshore L. P. is the Operator of the prospect and holds the remainder of the working interest. Drilling of this prospect commenced in August 2005 and was completed in October 2005.
Acom A-6 prospect is a 12,250-foot measured depth well into the Nodosaria and Tex Miss (Frio) formations. The prospect was identified with 3-D seismic and subsurface well control. Development was to test the Nodosaria Sands at the apex of a well-defined three-way structure on the up-thrown side of a large dip down to the southeast fault.
The deeper Tex Miss target was to test what is interpreted to be a channel sand that has been successfully drilled to the north and up-thrown of an east-west trending fault by the J. MacCarthy #9 well. This well had initial production of over 5 MMcf per day of gas and 860 Bbls per day of condensate and has produced over 3.4 Bcf of gas equivalent during its first 18 months. The Tex Miss target for the prospect was believed to be a continuance of this channel sand down thrown and to the south having a seismic event and character similar to that tested by the J. MacCarthy #9 well, which logged nearly 50 ft. of very high quality gas sand on water.
The Acom A-6 prospect currently holds proved reserves and is producing oil and gas with revenues being earned by us. We have estimated proved reserves of 13,652 bbls of oil and 69,542 mcf of gas. We have realized a total of 5,348 bbls of oil at an average price of $58.17
and 20,458 mcf of gas at an average price of $7.97 through June 30, 2006.
Our partner and Operator, Kerr-McGee, recently performed a workover of the well to clean out paraffin buildup, which had progressively reduced the oil and gas production rates. Upon completion of the project, the downhole pressure increased to levels close to those encountered when production began in October, 2005 and average gross daily production rates increased to over 225 barrels of crude oil and 1.15 million cubic feet of natural gas.
Please see our Operations Update dated June 1, 2007 for the latest information.
