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TORONTO--(Marketwire - May 13, 2009) - Magellan Energy Ltd. (PINKSHEETS: MGLG), an independent oil and gas company, announces that it has completed all preliminary work on the Thomas D. Martin Lease in Morgan County, Tennessee.
Citizens Gas has placed a large compressor where its Burrville gathering system ties into a 350 lb. pressure line. Citizens Gas receives its gas supply from the east Tennessee gas pipeline and from various local gas producing wells in Scott, Morgan, Fentress and Anderson counties, and will be "blending" the gas from all other wells in these counties to lower the BTU levels. All operators in the area have agreed to pay for the compressor lease.
The line carries nearly 10 million cubic feet a day. The blending process for the high BTU gas from the Burrville system will ensure that the BTUs will not exceed the critical 1100 level. Magellan intends to sell gas through this system from both the Martin and the Anderson leases.
While Magellan is close to the production on the Martin lease and, therefore, close to realizing revenues, estimation on gas production output is not currently available as initial results from the blending process are still pending. The Anderson well will eventually also be transporting its gas to market through this system.
Magellan's focus is on achieving the ability to sell the gas first hand, which will be complemented by production numbers. In addition to the gas sales, the Company anticipates an increase in oil production due to the added gas production coming from this well.
The Company is pleased with its progress to date, and is extremely optimistic about our prospects going forward. We would like to thank our loyal shareholders for their patience and support as we enter this next phase of our business.
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TORONTO -- (Marketwire) -- 05/12/09 -- Magellan Energy Ltd. (PINKSHEETS: MGLG), an independent oil and gas company, announces progress to date for the Robert Anderson Lease in Morgan County, Tennessee. The well had experienced some problems with the high BTU levels in the past and had been shut in. Work is progressing on the well to prepare it for the production phase. Magellan Energy is anticipating production revenues from this well for 2009.
Management has been, for some months now, working closely with our operator, TMD Energy Inc. and Citizens Gas, in taking the necessary steps to re-connect the Anderson well. Citizens Gas has set in a compressor to enable the operators to tie in the lines from the Anderson lease. There will be several other lines from other wells in the surrounding area coming into this compressor to achieve a blending process.
Magellan Energy Ltd. has engaged the issue from Federal Regulators regarding the mandate on maintaining BTU levels of 1100 or less and has come to a resolution. They will be "Blending" the gas from the Anderson Lease with other wells in the area to achieve a lower BTU level and allow sales to begin.
It is quite unfortunate that we have been faced with long delays but we are pleased with the progress to date and anticipate production to begin in May 2009. The compressor has been set in by Citizens Gas and we are in the process of tying in our lines to begin production. TMD Energy Inc has done an incredible job meeting and working with Citizens Gas representatives to resolve our issue with this well and will continue to focus on the production and revenue phase of the Robert Anderson Lease. We anticipate that "Blending" the gas will ultimately reduce our BTU levels allowing us to continue with gas sales from this well. We are not alone on this, this area has several other wells facing the same issue and by working together we have tackled this problem and look forward to placing this well into production. The next coming weeks will be an exciting time for Magellan and its shareholders as we prepare to take in long awaited revenues from this well. It has been a trying time for all of us but we continue to work extremely hard in achieving a positive future for Magellan and its shareholders.
About Magellan Energy: Magellan Energy is a publicly traded independent oil and gas company (PINKSHEETS: MGLG). The company is actively acquiring oil and gas leases, producing properties, mineral rights, and surface interests in Tennessee and Oklahoma. Once acquired, the company intends to develop each property to maximize the income from each property by re-establishing production, refurbishing and improving the existing production and operations.
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