Grand Gulf Energy (ASX:GGE) has started disposing water production from its Dugas & Leblanc-3 well into the Dugas & Leblanc-2 well, saving about $25,000 per month in water trucking and disposal costs.
Dugas & Leblanc-3 is currently producing 105 barrels of oil, 162,000 cubic feet of gas and 560 barrels of water per day from the M sand.
This is expected to generate revenues of US$80,000 per month, or US$960,000 per annum, at current oil prices of US$60 per barrel.
Following further detailed seismic and analogue interpretation work, the company believes that the M sand may have updip potential of an additional 5 to 15 billion cubic feet of gas.
This will need to be recovered from either a development well or side track to the Dugas & Leblanc-3 well if confirmed.
Additionally there continues to be recoverable oil from the N and O sands.
The company has also reached a full and final settlement between the personal injuries plaintiffs affected by the Dugas & Leblanc-1 blowout and the joint venture partners.This settlement, which is expected to be covered by insurance, resolves all the outstanding claims by third parties.
