News: Grand Gulf Energy targets more oil production with Louisiana well

Grand Gulf Energy (ASX:GGE) has spudded the Templet-1 well in Louisiana that targets between 600,000 to 800,000 barrels of oil in an updip segment of a proven oil bearing compartment.

The well is presently drilling ahead at 374 feet and is anticipated to take 45 days to drill to total depth.

Templet-1 is located on the Louise Prospect in Napoleonville Dome. Grand Gulf owns a 22.57% working interest and will be paying 19.26% of the dry hole well costs.

It is expected to penetrate an accumulation of oil in a 3D-defined, normally pressured block, updip from a productive well where an equivalent target interval has produced 2.2 million barrels of oil and 10.5 billion cubic feet of gas.

The prospect follows the same style as Desiree, located to the immediate south and was developed using GGE's inhouse geological and geophysical team.

The well is considered low risk both from drilling operations and geological/geophysical perspectives.

Current Operations

The company currently produces 188 barrels of oil equivalent per day from its Desiree, D&L and Abita projects with net production of 15,392 barrels of oil and 27.57 million cubic feet of gas in the quarter ended 30 June 2014.

Installation of production facilities are progressing well at West Klondike, which tested at flow rates above 2 million cubic feet of gas per day and associated condensate.

All facilities and tie in are complete, however, due to third party pipeline problems production will only commence in September 2014.

Analysis

The current drilling at Louise could deliver substantially increased production and market interest.

Grand Gulf Energy's existing producing oil and gas assets are profitable, generating monthly net operating cash flow of about US$400,000.

Its exploration and development program for 2014/15 is fully funded is another positive when taken against its low market cap of circa $7 million.

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