RE: Production Disruption? Winstar Reports Production Interruption in Southern Tunisia (cnw)
CALGARY, Jan. 28, 2013 /CNW/ - Winstar Resources Ltd. ("Winstar" or "the Company") (TSX: WIX) reports that approximately 1,100 barrels of oil equivalent per day ("boepd") (of a total 1,300 boepd of net production) derived from its 100% owned and operated Sanhrar, Chouech Essaida and Ech Chouech Concessions has been shut-in since January 16, 2013 due to safety and security concerns related to labour disputes.
Members of the Union Générale Tunisienne du Travail -Tataouine ("UGTT- Tataouine") commenced a three day strike on January 16th 2013. Following the advice of Winstar's legal counsel further to operational safety and security concerns, the Company ordered the evacuation of all personnel from its three concessions. Approximately 20 previous strikers failed to evacuate with all others at the evacuation deadline of January 19, 2013, but following extensive discussion with the relevant authorities, did depart, under the supervision of the Tunisian National Guard on January 26th and 27th.
The Company had been in regular contact with relevant authorities, in Tunis and Tataouine throughout this incident, in particular with the Industry and Trade Ministers.
Prior to the strike Winstar was producing about 1,300 boepd and, during these incidents, it was producing a net 180 boepd from its 45% working interest but operated Sabria Concession in central Tunisia.
The Company is beginning the production start-up process, which is expected to take about one week. The controlled shut-in of wells, using variable speed drives immediately prior to the January 16, 2013 strike should eliminate potential damage to down-hole electric pumps. The mechanical or electrical damage of downhole electric pumps related to the strikes of 2012 is the primary reason the Company has and continues to struggle to restore production.
The disruption caused by labour disputes has delayed the recompletion of a number of Chouech Essaida Triassic oil wells including Chouech Essaida Silurian #10. As reported on November 8, 2012 the Company believes it is capable of producing 2,000 to 2,900 boepd further to successful workovers or recompletions of five Chouech Essaida wells that are currently suspended.
As reported originally on July 3, 2012, the Company has retained FirstEnergy Capital LLP to explore and evaluate potential strategic alternatives with a view to enhancing shareholder value. This process is ongoing.
BOE
Reference herein to "boe" mean barrels of oil equivalent and is derived by converting gas to oil in the ratio of six thousand cubic feet (Mcf) of gas to one barrel (bbl) of oil. Boe may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf to 1 bbl is based upon an energy conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. References herein to "boepd" means barrels of oil equivalent per day.