SAN FRANCISCO, November 6 /CNW/ - GeoPetro Resources Company ("GeoPetro"
or the "Company") (AMEX: GPR) (TSX:GEP.S) today announced operational start-up
of the expanded gas treatment facilities at its Madisonville Project located
in East Texas. Madisonville Gas Processing LP ("MGP") has informed the Company
that it is currently accepting 20 million cubic feet of gas per day ("Mmcfd")
at the inlet of the expanded portion of the plant. MGP has further indicated
that, barring unforeseen circumstances, the full expansion of the plant's
designed capacity from 18 Mmcfd to 68 Mmcfd of natural gas should be completed
by the end of the month.
Upon completion of the plant expansion, we expect to produce the Fannin
and Magness wells at a higher rate as those well rates have been previously
restricted due to capacity limitations in the gas treatment plant. We also
expect to commence production from the Mitchell well, which is currently
shut-in awaiting a workover and the plant expansion. In addition, we plan to
place the Wilson well on production in early 2008, provided a planned fracture
stimulation of the well is successful.
Our contract with MGP provides that for volumes of natural gas delivered
in excess of 18 Mmcfd, MGP will receive a reduced treating fee per thousand
cubic feet (Mcf). We record our revenues net of these treating fees. Thus, if
we are able to increase natural gas deliveries to the gas treatment plant in
excess of 18 Mmcfd on a sustained basis, we expect to experience a
disproportionately higher increase in revenue due to lower average treating
fees per Mcf.
While there can be no assurance, the higher production rates from our
wells combined with lower average treating fees per Mcf and a more efficient
treating facility should result in higher net production and increased revenue
on a prospective basis.
Bengara-II Block Drilling Program
The Seberaba-1 was originally planned to reach a total depth of 4,000
meters (13,120 feet). Drilling of the Seberaba-1 terminated at a depth of
2,914 meters (9,558 feet) in the third of three sidetracks made from the
original wellbore. Testing activity of the Seberaba-1 has been suspended.
Approximately 150 barrels of crude oil has been recovered by swabbing. Flow
test and pressure build up tests to date have proved inconclusive due to
apparent formation damage. Any future re-entry would be conducted with a
different drilling mud and testing fluid program to avoid damage to the target
Drilling activity on the Seberaba-3 well is continuing. Currently an
attempt is being made to sidetrack the Seberaba-3 after stuck drill pipe
resulted in an 800 meter (2,624 foot) long fish being lost in the original
hole before logs could be obtained. The Seberaba-3 is planned to a total depth
of 2,800 meters (9,184 feet) to test possible reservoir zones below 2,400
meters (7,872 feet).
Drilling activity on the Seberaba-4 has been terminated. Seberaba-4
failed to encounter an expected reservoir sand anticipated at 2,450 meters
(8,036 feet) probably because the wellbore penetrated a normal fault and the
expected reservoir interval was faulted out. The Seberaba-4 wellbore has been
suspended and preserved for possible re-entry.
Drilling of the Punga-1 well continues below 1,700 meters (5,576 feet) to
a planned total depth of 2,800 meters (9,184 feet). No objective formations
have been encountered yet.
Despite the inconclusive results of the Seberaba wells, the Company
remains positive that the Seberaba prospect can be properly drilled and
evaluated for future commerciality.
GeoPetro is an independent oil and natural gas company headquartered in
San Francisco, California. GeoPetro currently has projects in the United
States, Canada and Indonesia. GeoPetro has developed a producing property in
its Madisonville Project in Texas and is conducting a drilling program in East
Kalimantan, Indonesia. Elsewhere, GeoPetro has assembled a geographically
diversified portfolio of exploratory and appraisal prospects.
This news release contains forward-looking information. Statements
contained in this news release relating to future results, events and
expectations are forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended and Section 21E of the Securities
Exchange Act of 1934, as amended. These forward-looking statements involve
known and unknown risks, uncertainties, scheduling, re-scheduling and other
factors which may cause the actual results, performance, schedules or
achievements of the Company, or industry results, to be materially different
from any future results, performance or achievements expressed or implied by
such statements. Such factors include, among others, those described in the
Company's Annual Report on Form 10K on file with the U.S. Securities and
No stock exchange or regulatory authority has approved or disapproved of
the information contained herein. GeoPetro's common shares which trade on the
Toronto Stock Exchange contain the ".S" suffix in the trading symbol
indicating that the common shares are subject to trading restrictions imposed
pursuant to Regulation S under the 1933 Act. In particular, the common shares
which trade on the Toronto Stock Exchange may not, for a period of two years
from the date of issuance, be offered or sold to persons in the United States
or U.S. persons except in transactions exempt from registration under the 1933
Act. Hedging transactions involving the common shares must not be conducted
unless in accordance with the 1933 Act.
For further information:
For further information: GeoPetro Resources Stuart J. Doshi,
415-398-8186 (President & CEO) firstname.lastname@example.org www.geopetro.com