HOUSTON, Oct. 30 /PRNewswire-FirstCall/ -- Southern Star Energy Inc.
(OTC Bulletin Board: SSEY, the 'Company'), a fast-growing exploration and
production ('E&P') company with reserves and production from leases located in
northern Louisiana, today provided a corporate update and evidence to
demonstrate the Company's strong position in view of continuing market
uncertainty.
Production and Drilling Update
The Company's Cotton Valley program continues to respond favorably to
production enhancement projects. In mid-September, the Company installed
field compression at several sites, resulting in a stabilized production
increase of more than 10% field-wide production. Additional production
enhancement projects have been designed and will be implemented during early
November. Despite softening prices, the initial five Cotton Valley wells
continue to produce cash flow in amounts sufficient to fund overhead and
continuing technical development. The Company received an average of $7.67
per MMBtu for its gas in September. The global financial crisis has had a
negative impact on natural gas prices; however, there is a marked reduction in
service costs and the Company is benefiting from its low-cost structure.
During the period of October 13 through 27, the Company produced 2.3MMcf/d on
average.
As previously announced, the first two wells in the Company's 2008
Development program encountered gas pay zones in the Cotton Valley comparable
to the pay intervals in the Company's existing five producing wells. The
Company believes that both wells will be additive to our proved reserve base,
and greatly enhance the Company's probable reserve potential. The Cash Pointe
30-1 is presently awaiting completion. Our second well encountered similar
pay sands in the Cotton Valley before being deepened to test the Haynesville
interval as noted below.
The Company recently announced a successful Haynesville Shale well
discovery from its Atkins-Lincoln 17-2 in the Sentell Field. This news is a
significant strategic milestone for the Company, further demonstrating its
ability to deliver positive results, even during a period of historically
unique market conditions within the E & P sector.
The Company remains focused on delivering operational success and building
shareholder value through solid growth of both reserves and production rates.
In light of the successful Haynesville test at the Atkins-Lincoln 17-2
location, the Company spudded the Burt 20-1 Well on October 25, 2008 as a
second Haynesville test in the Sentell Field. This well is located in the
southwest section of the Company's acreage position and is designed to
demonstrate the quality and extent of the Field's Haynesville potential.
