INA.V +.05 +11.83%
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Iona Energy Inc. ("Iona" or the "Company") (TSX VENTURE:INA) is pleased to announce today that the 44/18-T6 ("T6") well has been drilled from the Tyne Gas Field Platform and has successfully encountered a gas filled Carboniferous reservoir section. Completion operations to prepare the well for production are commencing and are expected to be brief. Upon completion, the Company will provide an update regarding initial flow rates. Iona owns a 20 per cent interest in both the Trent & Tyne gas fields with an option to increase interest in both fields to 37.5 per cent.
The well T6 was drilled as a side-track from dormant production well T5 to a location higher up structure and to the north of T5 within the same production compartment. Well T5 had previously produced gas at rates of up to 25MMscf/d from a 50 foot gas column close to the gas water contact ("GWC") and had been shut in due to water encroachment. As planned the T6 side-track encountered top reservoir 57 feet higher than T5 and 107 feet above the regional GWC. T6 was drilled at a high angle through the reservoir and encountered 92ft of gas pay. Pressure testing of the reservoir has confirmed that T6 lies within a different reservoir compartment from production well T3 and will recover new reserves. Gaffney Cline & Associates ("GCA") have estimated the incremental proven plus probable reserves net to Iona to be 4.8 Bcf from T6 at an initial gross flow rate of 20 MMscf/d, with a net upside case of 6.4 Bcf of proven plus probable plus possible reserves (reserves estimates effective as of December 31, 2011). Further drilling opportunities have been identified in the Tyne South, North West, and East compartments.
Iona on acquisition of the 20 percent interest in the Trent & Tyne field committed to the funding of the drilling and completion of the T6 well at a capped net cost exposure to Iona of Pound Sterling21.2 million (approximately USD $32.9 million).
Iona's Chief Executive Officer, Neill Carson, commented: "The delivery of a successful new gas well, drilled from the platform in a short time fits with our plan to monetize new developments at low risk. We recently have realized spot gas prices greater than USD$11/Mcf and feel encouraged to continue to grow by looking for more drilling opportunities of this type on our gas assets."
JFF7
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