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Investor Linc Newsletter

December 2011 /20

GOING GLOBAL

Steady Progress in Barbers Hill Oil Field

Since acquiring ERG Resources in October Linc Energy has announced the commencement of production from the Higgins #18 oil well and drilling on the Fitzgerald Unit #1 of the Barbers Hill oil field in Chambers County, Texas, USA.  The well was drilled to a total depth of 1706 metres.

Higgin’s #18 is the first well to be completed under Linc Energy’s management, with production tests in the first perforated zone establishing the initial production rate from the well at 144 barrels of oil per day (BOPD) from a sandstone at 1631 metres.  This interval is three metres and is the deepest of the potential oil producing intervals in the well.  The well also encountered another 12 sandstones with shows in the shallower part of the hole.  These intervals will be tested when the first interval is depleted.

“The completion of Higgins #18 demonstrates Linc Energy’s commitment to the use of drilling technology to maximise production and our determination to extract the full value from the assets acquired from ERG Resources. This first completion program has resulted in one of the best initial production rates from this field in many years – a credit to our Texas based team,” CEO Peter Bond said.

Linc Energy has also commenced drilling on Fitzgerald Unit #1, the first new well totally drilled by the company since acquiring ERG Resources.  Spudding the Fitzgerald Unit #1 well represents a milestone for Linc Energy by kicking off the first of its development well program.  Drilling additional development wells in proven reservoirs is one of the methods that Linc Energy will use to unlock the vast oil potential held within these fields.

The Fitzgerald Unit #1 well is targeting multiple productive reservoir sands which have produced over one million barrels of premium crude in this part of the field.  To reach the multiple potentially productive sands the well will be directionally drilled, utilising the Pioneer Rig #15 at a proposed depth of 1,706 metres.  Linc Energy will be using advanced Logging-While-Drilling (LWD) technology, thus allowing for course corrections during drilling and assuring that the well will be in the most advantageous up-dip structural position. 

The Barbers Hill field was originally discovered in 1916 and has produced over 130 million barrels of oil.  A redevelopment program that was begun by ERG in 2010 that ultimately drilled over 20 new wells has increased production in the field from rates around 300 BOPD to a peak of 1800 BOPD in June of 2011.  This drilling program has unlocked a tremendous amount of additional potential in this field.  The field will now produce approximately 50% of Linc Energy’s current daily production in the Gulf Coast Region.  It is one of 12 producing assets acquired by Linc Energy.

Above: Higgins #18