Dune Energy on Further Drilling at Garden Island Bay and Plans High Impact Exploratory Well at Bayou Couba

Dune Energy on Further Drilling at Garden Island Bay and Plans High Impact Exploratory Well at Bayou Couba

Dune Energy said to the press that the company has commenced drilling the State Lease 214 #912 well at its Garden Island Bay Field, located in Plaquemines Parish, Louisiana. The well, the initial follow up to Dune’s very successful 2007 drilling program, is scheduled to reach total depth of 9,300 feet by mid-August, with production anticipated in September. Garden Island Bay has been producing approximately 1,500 B/d of oil plus 1.5 MMcf/d of natural gas. The #912 is expected to add 4 MMcf/d of natural gas and 250 B/d of oil. Several low-risk development wells have also been identified for drilling later in 2008 and into 2009. These wells will be scheduled to coincide with an upgrade of the field’s gas lift system.

At the Company’s Leeville Field in Lafourche Parish, LA, 4 wells are scheduled to be sidetracked for newly recognized updip potential, and a deep well (12,500 feet) targeting the Cib Carst sands is planned. All of these wells are being drilled by a private entity, with Dune maintaining a 20% carried interest. In the deep well, Dune will maintain an overriding royalty interest with an option to convert to a working interest at payout. Dune’s net production in the field has averaged 300 Mcf/d of natural gas and 220 B/d of oil. This drilling activity is anticipated to contribute an incremental net 200-300 B/d of oil and 100 – 200 Mcf/d of natural gas. At the Comite Field, in Baton Rouge Parish, LA, Dune is currently conducting a workover of the Cobb #1 well in an effort to eliminate water production from a zone below the primary reservoir. Success on this Tuscaloosa project is anticipated to add 1 – 3 MMcf /d of natural gas in additional net production. Dune has a 100% working interest in this well.

President and Chief Executive Officer, James A. Watt, stated “We anticipate the sale of the Barnett Shale assets to close shortly, and we are initiating an active drilling, recompletion, joint venture and farmout program to enhance near term production volumes and maximize returns. In conjunction with that activity, we will continue to evaluate several high potential deeper pool tests at our major fields, with drilling later in 2009 and into 2010.”

Source: Dune Energy, Inc.

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