Brisbane, Australia, Oct 30, 2012 - (ABN Newswire) - Pryme Energy Limited (ASX:PYM.AX - News) (OTCQX:POGLY - News) is the largest equity owner in the Turner Bayou project which controls a large acreage position in Avoyelles Parish, Louisiana with demonstrated prospectivity for oil. The Turner Bayou project area is surrounded by medium to large Exploration and Production (E&P) companies which are focusing on both the Austin Chalk formation and the emerging major oil resource play in the Tuscaloosa Marine Shale formation (TMS) which extends from Central Louisiana into South-Western Mississippi. Both the Austin Chalk and the TMS are well represented in Pryme's acreage.
E&P companies that have been attracted to the TMS in recent times include Encana Corporation, Devon Energy, Indigo Minerals LLC, EOG Resources Inc., Goodrich Petroleum Corporation and the newly formed Halcon Resources Corporation (founded by the former founder, chairman and CEO of Petrohawk Energy Corporation). EOG Resources is currently drilling two TMS wells adjacent to Pryme's 50,000 acre Turner Bayou 3D seismic survey.
Good exploration results have already been achieved in this oil rich shale play. The following diagram shows a comparison of the TMS with other major US oil shale plays. Initial production rates achieved in the TMS have already exceeded those of the Bakken shale and are heading towards those of the prolific Eagle Ford shale in South Texas. As the TMS is further de-risked, and drilling and completion efficiencies increased, the value of this major resource area will increase.
Since late 2010, the cost of a 3 year paid-up lease over TMS acreage has increased to over $500 per acre. Recent acreage prices have been particularly strong with reports of prices up to $1,000 per acre. The Turner Bayou project has a gross acreage position of approximately 25,000 acres underpinning its Austin Chalk drilling program. Pryme's net interest is approximately 10,000 acres.
"The TMS is well on the way to becoming a major United States oil resource. Recent exploration results from E&P companies drilling in the region are very encouraging. Pryme is in the enviable position of controlling significant TMS acreage while drilling and developing its Austin Chalk play in the Turner Bayou project," said Justin Pettett, Pryme's Managing Director. "We are confident that Turner Bayou will create great value for Pryme and its shareholders from the current Austin Chalk drilling activities as well as from its TMS potential."
Pryme will continue to monitor TMS exploration and production activity and update the market as appropriate.
About the Tuscaloosa Marine Shale
The Tuscaloosa Marine Shale (TMS) is an oil and gas "play" in Louisiana and Mississippi that is enjoying significant interest from large E&P companies. The TMS formation is a proven source rock and is prospective over an estimated 2.9 - 7.4 million acres. The formation ranges in depth from 10,000 to 16,000 feet subsurface and extends from central Louisiana into south-western Mississippi. It is analogous to, and comprises the same formations as, the nationally prominent Eagle Ford Shale play in south Texas.
TMS exploration over the past 20 years has indicated the oil and gas potential that can be realised through the application of modern drilling and completion techniques.
A vertical completion in the TMS by Gulf Oil in 1977, within the area of Pryme's 3D seismic survey, tested at an initial rate of over 100 barrels of oil per day plus associated gas with no stimulation. In more recent times several medium to large E&P companies operating in proximity to the Turner Bayou project area have achieved encouraging results from tests of the formation.
In 2010 Pryme's Deshotels 20H well intersected the TMS and encountered minor reservoir rock with porosity up to 16% and very encouraging mud log hydrocarbon shows. The intersection compares favourably to some of the better locations in the Eagle Ford play in South Texas which exhibit porosities in the 6% to 12% range.
About the Turner Bayou Chalk Project
The Turner Bayou project comprises approximately 80 square miles (50,000 acres) which have been imaged by a proprietary 3D seismic survey. Pryme has a 40% working interest in 25,029 acres (10,011 net acres) in the Turner Bayou project area and is initially targeting development of the Austin Chalk horizon which overlies the TMS.
Pryme is currently drilling the Rosewood Plantation 21H No.1 well in Turner Bayou. The well is to be drilled to a vertical depth of 14,919 feet (4,550 metres) with a planned 5,000 foot (1,524 metre) lateral designed to intersect naturally oil-bearing fracture systems within the Austin Chalk formation. The Rosewood Plantation 21H is currently drilling ahead at a vertical depth of 9,545 feet (2,909 metres).
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About Pryme Energy Limited:
Pryme Energy Limited (ASX:PYM.AX - News) (OTCQX:POGLY - News) is an Australian company exploring for oil and gas in the Gulf Coast states of the USA. Pryme currently has three oil and gas producing projects and substantial exploration acreage. The Company's immediate focus is the development of a major phase oil Austin Chalk formation exploration and production play, with Tuscaloosa Marine Shale potential, in its Turner Bayou project in Avoyelles Parish, Louisiana. Louisiana is the fifth largest oil and gas producing state in the US.
Pryme's board of directors and management team have over 100 years of energy industry experience with extensive local knowledge underscored by proven track records. Pryme applies advanced geological science to drive early stage exploration projects through to production.
Pryme Energy Limited T: +61-7-3371-1103 F: +61-7-3371-1105 WWW: www.prymeenergy.com
Pryme Energy Limited
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