Sterling production increased as new GOM gas well exceeds expectations

April 2, 2003
Gryphon Exploration Co. and its partners received a significant increase in gas revenues because of better-than-expected production from the Gryphon No. 2 well on High Island Block 52 field in the Gulf of Mexico, said partner Sterling Energy PLC, which holds a 7.58% royalty interest in the area.

By OGJ editors

HOUSTON, Apr. 2 -- Gryphon Exploration Co., Houston, and its partners received a significant increase in gas revenues because of better-than-expected production from the Gryphon No. 2 well on High Island Block 52 field in the Gulf of Mexico, said partner Sterling Energy PLC, which holds a 7.58% royalty interest in the area.

The well is expected to produce gross production flows of some 25 MMcfd in March with royalty income for Sterling of $300,000.

Sterling said the Gryphon No. 2 reservoir interval is about 3 times thicker than that encountered by the Gryphon No. 1 well, which came on stream at more than 20 MMcfd in 2001 (OGJ Online, Nov. 12, 2002).

"We are currently evaluating the impact on the reserves of the field of the thicker-than-expected reservoir interval. We are optimistic that this will result in a significant upgrading of reserves," said Harry Wilson, chief executive of Sterling Energy.

"The revenue from Gryphon No. 2 is royalty income achieved at no additional cost to us following a successful farm-out. An additional bonus is that gas prices are now over $5/Mcf," Wilson added.

Sterling currently is evaluating further drilling targets in the area and it plans a program of recompletions, workovers, and drilling of as many as 6 wells in the Gulf of Mexico in 2003.