EUREKA ENERGY LTD

(ASX: EKA, "Company" or "Eure ka) ASX RELEASE

21 DECEMBER 2011

SU G A R L O A F OP E RA T I ON S A N D P RODU CT I O N U P D A T E

Eureka is pleased to provide the following update on operations and production for the Company's Eagle Ford Shale acreage at the Sugarloaf Area of Mutual Interest ("AMI") in Texas, USA. As of November 1st 2011, the Sugarloaf wells are all operated by Marathon Oil Corporation ("Marathon").
As at report date there were 24 producing wells in which Eureka holds an interest, including 6 farmout wells. Eureka has been advised by Hilcorp that the cost recovery mechanism on the farmout pool of 3 new Sugarloaf wells has been repaid and that Eureka will participate in the revenue from those wells from October. Eureka has been advised that the payout period has taken considerably longer than the simple cost recovery of well Capex because of the inclusion of additional infrastructure costs in the payout calculation mechanism. This infrastructure has facilitated early field production.
Sugarloaf AMI gross production in November was 230,973 boe which comprises 135,064bbls oil and 34,527bbls NGLs and 368.3MMcf of gas by volume. Production figures have been influenced by a number of wells being shut in for the installation of production tubing during November; the figures this month do not reflect field production capacity.

EUREKA  ENERGY  LIMITED  

ABN  46  116  829  139  

LEVEL  3,  3  ORD  STREET   WEST  PERTH  WA  6005   TELEPHONE:     FAX:     +61  8  9321  9337   +61  8  6314  1557       www.eurekaenergy.com.au

PR O D U C T I O N D A T A

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The following wells have been on production for a period of either 30 or 60 days and Eureka is pleased to provide the market with an update on the produced volumes during that period:-

*The equivalent barrels per day production rate has been calculated on a simple 6:1 ratio.

OP E R A T I ON S
Following the assumption of Operatorship, Marathon advised that it planned a systematic program of tubing installation across the wells in the field. The majority of the wells have to date produced through 5 ½" production casing and are to have 2 3/8" production tubing installed with gas lift valves for future purposes. The smaller bore tubing will help optimise the lift performance of these high liquid content wells.
In addition the following operations have taken place:-

HOLLAND OPIELA #1H (0.73% WI)

The Holland Opiela #1H well commenced production on December 8th 2011. ASX participants in the Sugarloaf AMI are:
Eureka (ASX:EKA) - 6.25%
Aurora (ASX:AUT) - 15.7% AWE (ASX:AWE) - 10%
Yours sincerely

EUREKA ENERGY LIMITED

Peter Mills

Managing Director

Technical Information contained in this report has been reviewed by Mr Peter Mills B.Eng, Managing Director of Eureka who has had 29 years experience in petroleum engineering and

has consented to the inclusion of the information in the form and context in which it appears.

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Documents associés
Sugarloaf Operations Update