Highlights:
GEM's net domestic prod rate at 8 million cubic feet equivalent of natural gas per day surpassed the prod prior to 2005 hurricane season.
Individual updates:
Lake Raccourci Field, Lafourche Parish – Louisiana - prod for this field 2.8 mil cfe of nat gas per day. ... is expected to be about 4 mil.... could reach 6.8 mil.
Point-au-Fer Field, Terrebonne Parish – Louisiana - GEM drilling of 2 wells now prod 2.75 million gross cfe NG per day. The 2nd well logged and cased. Completion rig is anticipated in the 4Q 06. One workover and recompletion of a well successful
prod at 1.1 mil gross cfe NG per day. A second workover on an additional existing well is planned for the third quarter of 2006. Several prospects have been identified...GEM expects to have additional drilling and workovers in 2006.
Allen Ranch Field, Colorado County – Texas has increased its production from 2.5 million to approximately 5.0 million gross gross cfe NG per day. A second well, the Hancock Gas Unit #2, was drilled and logged as productive in the same four sands as the Hancock Gas Unit # 1 well and two deeper zones. During 2006, the deeper of the two zones has been fracture stimulated and produced about 5.0 million gross cfe NG per day. This zone has now been shut-in to test the other productive zone in the well bore.
Branville Bay Field, Plaquemines Parish – Louisiana – in 2006 returned to pre-hurricane product rates of about 2.9 million gross gross cfe NG per day. GEM has a non-operated working interest of 12.5% in this area.ü
Point-a-la-Hache Field, Plaquemines Parish – Louisiana - repairs to the production barge completed, current zone watered out. will perform a tubing recompletion once the workover unit barge is received at the location..to be completed by the end of July 2006. GEM maintains a 25% operated working interest in the area.
Lapeyrouse Field, Terrebonne Parish – Louisiana - GEM holds an average non-operated working interest of 8.2% in eight wells in this field. During the six months ended June 30, 2006, GEM has participated in two workovers in the field. Current gross field production is about 23.5 million gross cfe NG per day. Also in 2006, GEM participated in the drilling of their ninth well in this field, and this well has been recompleted to the next productive sand and is producing about 3 million cubic feet equivalent of gross natural gas per day. GEM holds an approximately 39% operated working interest in this ninth well.
Coalbed Methane Prospects - Indiana and Ohio
Indiana Prospect - GEM elected to proceed and fund pilot well drilling under Phase II of the agreement. GEM is experiencing limited availability of needed equipment in order to move forward with the pilot program. However, GEM still expects the drilling of the pilot wells to occur during the third quarter of 2006.
Ohio Cumberland Prospect - Core samples from the Ohio CBM prospect are being analyzed for gas content, gas composition and characteristics of the coal. Depending on final results and availability of equipment, GEM may elect to schedule drilling of pilot wells on its Ohio CBM prospect area during 2006.
