U.S. Energy Corp. Announces Positive Drilling Results At Bluffs Prospectadmin
U.S. Energy Corp., a natural resources exploration and development company with interests in molybdenum, oil and gas, and real estate, today announced that its partner, PetroQuest Energy L.L.C., has reached contract depth on the Bluffs Prospect in Louisiana, encountering approximately 85 feet (true vertical depth) of net pay in the Cris I – Hollywood 1 Sand.
“These results mark a successful start to our relationship with PetroQuest as we begin to progress through the initial three-well drilling program,” stated Keith Larsen, CEO of U.S. Energy Corp. “With a strong financial position and these first steps in our strategy completed, we are currently evaluating additional opportunities as we look to expand our oil and gas portfolio.”
A production liner has now been set and completion is expected to take place over the next few weeks. Further testing will be required before actual production rates of the well will be known. Production from the well is expected to commence in the fourth quarter of 2008 but is dependent on the logistical impact of the Atlantic Hurricane Season. U.S. Energy Corp. participated in this well as a 20% working interest partner with a 25% back-in provision to completion decision. This back-in provision is held by a participant in the well and is specific to this leasehold. As a result, U.S. Energy Corp. will have a 15% working interest in this well going forward. This provision will not apply to the next two prospects to be drilled with PetroQuest. Following completion at the Bluffs Prospect, the rig will be mobilized to spud the Highlands Prospect. The Highlands well should spud within two weeks and is estimated to reach its target depth in the fourth quarter. It is anticipated that immediately following the drilling of the Highlands Prospect, the rig will then be moved to spud the St. Andrews Prospect. PetroQuest, Inc. will be the operator of both of these projects.
U.S. Energy Corp. is a diversified natural resource company with interests in molybdenum, oil and gas, and real estate. The Company is headquartered in Riverton, Wyoming, and its common stock is listed on The NASDAQ Capital Market under the symbol “USEG.”