Oil and gas group Aminex (LON:AEX) this morning reported that it had finished fracture-stimulating and flow-testing five zones in its recently drilled Olympia Minerals 10-1 well at Shoats Creek in Louisiana, US. Three of the five zones tested have now been placed on production and are delivering both oil and gas into pre-prepared production facilities and nearby pipelines. Average production is approximately 500 barrels of oil equivalent per day ('BOED') of which 70% is oil and 30% is gas.

OM10-1 was drilled to target depth in August by Aminex and its Shoats Creek neighbour, El Paso E&P Company. In July, the two sides signed a joint exploration agreement covering a deep prospect in Upper Wilcox sands which was believed to span the acreage of both companies. Following promising initial well logs, El Paso E&P recommended that greater productivity could be achieved by fracture treatment of individual formations.

Aminex said the result of the work was a light crude oil, graded as 45 degrees API. Crude oil produced at Shoats Creek customarily sells at a small premium to the West Texas Intermediate (WTI) marker price due to a combination of its high API grade and proximity to refineries. Test production will continue for up to 60 days, at the end of which a decision will be made whether to continue producing only the three zones, leaving the remaining two zones behind pipe for future production, or whether to produce from one or two more zones immediately. The decision will be dependent on reservoir management considerations and experience gained during the initial test production phase. Two further step-out wells are proposed for drilling on the same Upper Wilcox prospect during 2011.

Aminex chairman Brian Hall said: “We are very pleased with this result which represents a step change in our US operations and a successful result for the first exploration well we have drilled in the Upper Wilcox sands at Shoats Creek. With several other drillable prospects defined by 3D seismic in both Upper and Lower Wilcox sands, together with drillable prospects in the overlying Cockfield and Frio sands, Shoats Creek should now begin to make a material difference to the company's development and production activity.”

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