Production rises at Silvermere Energy's Mustang Island field

Shares in AIM-listed oil and gas exploration and development company Silvermere Energy rose after the company unveiled an operational update on its Mustang Island 818-L field in the Gulf of Mexico.

Shares in AIM-listed oil and gas exploration and development company Silvermere Energy rose after the company unveiled an operational update on its Mustang Island 818-L field in the Gulf of Mexico.

The company reported that total production and sales of gas recorded during the month were 11.5m standard cubic feet, representing a 32% increase month-to-month and total production of oil of 1,845 barrels, representing a 4% increase month-to-month.

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Silvermere Energy reported that the well was flowing for 73% of the time in February, which it described as a "significant improvement" in the previous month. Flow rates were restricted at times, it said, due to partial obstruction of the choke with drilling mud and debris as well clean-up continued.

The company reported that oil produced during January and February had not yet reached the shore installation and sales meters due to slow flow rates in the 20" line at the high pipeline operating pressure. It said that the operator had advised that it intended to reduce pipeline operating pressure to increase flow velocities in the pipeline and thereby to deliver first oil sales.

Silvermere owns a 16.66% working interest in the I-1 well at the 818-L field and a 33.33% working interest in future wells on the leases.

Andy Morrison, Chief Executive Officer of Silvermere, commented: "We are pleased to note the improvements achieved during February 2013 which keep us on track to deliver flow rates in line with previous projections. The clean-up is continuing and we look forward to further progress with operations in March."

Silvermere's share price was up 1.92% to 6.62% at 11:48 on Tuesday.




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