*****NEWS*****Attention Business Editors:
Osprey Energy Limited
www.ospreyenergy.com
HALIFAX, April 9 /CNW/ - Osprey Energy Limited (CDNX-OEL) is pleased to
announce it has successfully completed remedial work and commenced production
on its Crosby 36A Well in Louisiana.
The Well is currently producing at 960 BOPD and 2.5 MMCFGD with a 12/64
choke and a Wellhead pressure of 7,100 PSI. It has averaged 820 BOD and 3.5
MMCFD since it began flowing. The Well is being closely monitored during this
test period and will be produced at varying rates over the next 30 days to
determine the optimum rates for sustained production. Based upon current
rates, the Company anticipates sustainable production to be in the 500-600 BOD
and 2.5-3.0 MMCFGD range or 1,000-1,200 BOED.
The Crosby 36A is a high pressure Well with a total depth of 19,800 feet,
proven reserves of 7.8 BCFG and 270,000 BO, successfully drilled by Union
Pacific Resources (UPR) in late 1998 but never equipped, produced or tied-in
to the commercial gas-gathering system. This Well is now being produced
through the pipeline recently constructed to tie it into the infrastructure of
another Company Well, the Crosby 25, which is fully equipped and tied into a
commercial gas-gathering system.
The Crosby 25 Well, drilled in late 1998 by UPR is currently not
producing but produced 142,821 BO and 554 million cubic feet of gas prior to
being plugged with shale in late 1999. Now that the work is completed on the
Crosby 36A, a schedule to commence remedial work on the Crosby 25 is being
finalized. The Company anticipates the Well will produce 300-500 BOD and 1.5-
2.0 MMCFGD once the work is completed. The Company expects this program to
commence in the coming weeks.
In October 2000, a Houston geological firm, Keljor Group, LLC, indicated
proved reserves of 11.2 BCF of gas, 498,000 BO and assigned a present value,
net to Osprey's after payout 50% WI of $24,006,108 USD, a PV10% value of
$11,986,021 USD and a PV 15% value of $9,764,321USD for these two Crosby
Wells.
The Company also wishes to announce it has agreed to a Convertible
Debenture of 1,500,000 units, consisting of one share convertible at $1.40 in
year one and $1.75 in year two and one warrant convertible into common shares
at $1.50 per share in year one and $1.75 in year two. A finder's fee will be
paid in this transaction, which is subject to CDNX approval.
This increased production and resulting cash flow, along with the
additional funding will enable the Company to accelerate the remedial work
program to develop other Wells on the Cotton Valley property and commence
remedial work on the Bayou Choctaw property, both located in Louisiana.
Over the past several months, remedial work completed on the Company's
three Louisiana properties has significantly increased revenues and cash flow.
The oil and gas from the Crosby 36A Well alone more than triples the company's
daily production, which is now expected to exceed 1,500 BOED.
ON BEHALF OF THE BOARD OF DIRECTORS OF
OSPREY ENERGY LTD.
"R. Gary Malone"
President