LONDON (ShareCast) - Oil and gas company Silvermere Energy on Monday posted initial flow rates in line with expectations at Mustang Island, on the Gulf Coast of Texas.

The group recorded total gas production and sales of 8.68m standard cubic feet for January following the re-opening of third party infrastructure.

Total oil production was 1,780 barrels for the month. Silvermere expects sales and production numbers to converge once oil charge of the pipeline is completed within the next month.

The well remains in the clean-up phase which interrupted operations a few times. Silvermere said it was cleaning accumulated drilling mud and debris from the platform equipment.

The company is yet to see a longer period of sustained production, but said experience to date supports previous guidance of daily commercial flow rates of 155 barrels of oil plus 700,000 cubic feet of gas.

"With the I-1 well in production we are pleased to note that initial flow rates are in line with expectations,” Chief Executive Andy Morrison said.

“Following the clean-up phase we expect to establish continuous commercial production and to optimise flow rates"
 
Silvermere owns a 16.66% interest in the I-1 well and a 33.33% stake in future wells on the leases.

Shares rose 1.69% to 7.50p at 11:16 Monday.

RD

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