Avalon Oil & Gas, Inc. (Avalon) (OTCBB: AOGN)(FWB: A3MA.F) announced that it has completed its first production run in the Lake Washington Field and received its check for sale of oil in December. The first month’s production run proved to be almost 40% higher than the company had projected. This increase in production, combined with much higher commodity prices, has increased the internal rate to over 35% on this recent portfolio acquisition.
Avalon acquired non-operated production in the Lake Washington Field in Plaquemines Parish, Louisiana, located about 60 miles south of New Orleans, effective November 1, 2007. The Lake Washington Field was discovered in the 1930’s and is located around a shallow piercement salt feature. Since discovery, the field has produced approximately 350 million barrels of oil, putting it among the largest oil and gas fields in the United States.
Swift Energy Company (NYSE: SFY), the operator of the property, reports replacing several of the oil storage tanks, during which time the field has been offline. As of the end of December, about 70% of the production was back online, with the remainder to return online shortly. Production levels are consistent with levels prior to the shutdown.
“We are extremely pleased with the initial production returns from the Lake Washington Field, and with Swift Energy’s operation of this property” said Avalon’s President and Chief Executive Officer, Kent A. Rodriguez. “Avalon’s team has broad experience developing oil properties in the region, and has maximized this opportunity to refine our asset base with high margin properties, while adding significant development drilling opportunities,” added Rodriguez.
The Lake Washington acquisition substantially increases Avalon’s daily production of oil and gas. Avalon holds approximately 0.7% working interest in 3 producing units that are currently making over 1000 barrels of oil per day. Avalon also acquired like interests in surface production facilities and two salt water injection wells in the transaction.
About Avalon Oil & Gas, Inc.
Avalon Oil & Gas, Inc. is an oil and gas investment company engaged in the acquisition of oil and gas producing properties. In addition, Avalon's technology group acquires and develops oil production enhancing technologies. Through Oiltek, Inc., Avalon’s majority-owned subsidiary, Avalon is building an asset portfolio of innovative technologies in the oil and gas industry to maximize enhancement opportunities at its various oil and gas properties.
Forward-Looking Statements
This press release contains statements, which may constitute "forward-looking statements" within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995. Those statements include statements regarding the intent, belief or current expectations of Avalon Oil & Gas, Inc., and members of its management as well as the assumptions on which such statements are based. Prospective investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, and that actual results may differ materially from those contemplated by such forward-looking statements. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.
Avalon Oil & Gas, Inc., Minneapolis
Kent A. Rodriguez, 952-746-9655
Fax: 952-746-5216
www.avalonoil.com