Hawkley Provides Update on Sorochynska Well

Hawkley Oil & Gas Limited recently announce that commercial production from Sorochynska Well #201 in Ukraine’s Dnieper Donets basin is progressing well and the company has received its first revenues from gas sales.

During the production start up period, optimisation of the processing equipment to yield the maximum gas and liquids from the well, will be determined.

Production commenced on February 17th with the well running on a 6mm choke producing flow rates of 5.29million cubic feet per day (mmcfpd) and 176 barrels of condensate per day. The data from the well-including a well head pressure of a constant 3,750PSI - indicates that once Hawkley achieves the optimal configuration of the processing equipment, a substantial increase in the flow rate through a larger choke is expected.

Hawkley is selling gas at a gross price of US$9.32 per thousand cubic feet (mcf). Liquids are currently being sold at a US$104 per barrel. Total operating costs including production taxes, gas and liquids processing costs, transportation costs and overheads run at around 30-33% of revenue.

Initially gas will be sold forward into the local market, on a monthly basis. Condensate is currently being sold every three days, also into the local market. Following the completion of the start up phase, the Company will consider a longer term off-take contract.

ASX traded Hawkley expects Well #201 is expected to generate significant cash flow, with Chief Executive Officer Richard Reavley commenting that performance so far indicates the well will be able to run at rates much higher than the initial rate.

“The new processing equipment we have installed at the local gas plant has integrated well with the existing facilities and early analysis of the gas and liquids and the reservoir data looks highly promising,’’ Reavley said. ‘’We expect to have the well producing around twice what we are seeing at the moment in the very near future.”

Source: Hawkley Oil & Gas Limited