Ann: First Oil Production at SM 71, page-2

Congratulations everyone. Apologies for formatting.

First Oil at South Marsh Island 71
 Oil Production for the SM71 F1 and F2 wells commenced on 23 March in the US Gulf of Mexico
 Production rates are not fully established, but are in the upper ranges of expectations
 Combined restricted oil rates from both wells as of 25 March are approximately 4,000 BOPD
Byron Energy Limited (“Byron” or the “Company”) (ASX: BYE) is very pleased to announce that
production has commenced at its flagship South Marsh Island Block 71 (“SM71”) oil development, in the
shallow water of the Gulf of Mexico. The commencement of maiden production has elevated the
Company to producer status.
As previously reported over the past several months, Byron Energy Inc., a wholly owned subsidiary of the
Company has been moving to initiate oil production from Company operated wells drilled on SM71 in the
Gulf of Mexico. Three wells have been drilled, the SM71 F1and F2 wells are completed and producing
from the D5 Sand and B65 Sand respectively. Operations to complete the SM71 F3 in the D5 Sand are
currently in progress.
At approximately 2 PM US Central Daylight Time (“USCDT”) on 23 March 2018, after final regulatory
inspections were concluded, the Byron Energy operated SM71 F1 well was opened to the production
system on the SM71 F platform. After all flow lines and production vessels were filled with fluid and
operating pressures were established, the choke was slowly opened and the SM71 F1 well went into
production. Within 5 hours, the SM71 F1 well was producing at rates approaching 2,000 bopd with little
or no water. The well has been on continuous production ever since at a controlled rate. Last test data
at 3 PM USCDT 25 March 2018 was 2,118 bopd of 42 degree API oil, approximately 1 mmcfpd and less
than 1% water cut with 1500 psi flowing tubing pressure on a 22/64ths choke. Any water recovered is
completion fluid and is not from the D5 Sand reservoir.
On Sunday, 25 March 2018 at 2 PM USCDT, the SM71 F2 well was opened to the system and is slowly
being stepped up to a controlled rate. At 7 PM USCDT 25 March 2018 test data indicated a rate of 1944
bopd of 42 degree API oil, approximately 1 mmcfpd and less than 1% water cut with 1,540 psi flowing
tubing pressure on a 20/64ths choke. Any water recovered is completion fluid, not water from the B65
Sand reservoir. Because the well has only been flowing just a few hours, final rates have not been
established.
Neither the SM71 F1 nor the SM71 F2 well is currently producing at its maximum capacity due to facility
commissioning. As with any new platform, there are minor facility related issues to resolve prior to
producing the wells at their maximum safe. Currently, the wells are being restricted to a combined rateof 4,000 bopd. Based on current reservoir models, both wells are capable of significantly higher
production rates. The facility issues will be resolved over the next few days and production rates will then
be optimized for the facility capacity.
Operations to remove stuck completion tools from the F3 wellbore are ongoing. Once the stuck tools are
removed from the wellbore, and the completion finalised, it will be placed into production with the other
two wells. The SM71 F3 well intercepted 211 feet of measured depth oil pay (174 feet true vertical
thickness) in the D5 Sand. The Company perforated a 184-foot measured depth interval of D5 Sand and
completed sand control measures, before the tools became stuck. The SM71 F3 well had the thickest D5
Sand development of any well drilled by Byron in the SM71 reservoir.
Byron, through its wholly owned subsidiary Byron Energy Inc. is the operator of SM71 and has a 50%
working interest and a 40.625% net revenue interest in SM71. Otto Energy Limited group (ASX: OEL) holds
the remaining interest in SM71.
Byron will issue progress reports regarding the ongoing completion operations at SM71 as material
developments occur.
CEO Comment:
Maynard V. Smith, Byron’s CEO had this to say:
“To say we are extremely pleased with the rates from the SM71 F1 and F2 wells would be an
understatement. The observed rates are toward the upper range of our expectations for each well.
Both wells have come in to production easily which is the sign of both a high quality reservoir and a very
good completion. We expect the facility issues to be easily resolved this week and then we can establish
appropriate rates prior to bringing on the F3 well when it is ready.”
“My congratulations go out to our team and to the hard-working crews we have on the SM71 F
Platform. The process of commissioning a new platform is a very complicated task and everyone has
done a wonderful and efficient job of initiating production with no safety or environmental issues.”
“Commencement of production is a watershed event for Byron. It repositions the Company as an oil
producer. SM 71 is expected to generate significant cash flow and to broaden Byron’s investor appeal.”