Esenjay Exploration Inc. has completed and tested its Runnells #5 well in the deep geo-pressured Frio Trend in Matagorda County, TX, which production tested at an unstimulated daily flow rate of 21 MMcf and 710 bbl of condensate, with flowing tubing pressure of 7,436 pounds per square inch through a 25/64-inch choke. Esenjay, headquartered in Houston, is the generator and operator, and owns a 33% working interest. Esenjay turned the Runnells #5 well to sales and it is currently producing at a daily rate of 18 MMcf and 580 bbl of condensate. Combined, the company’s Runnells #5 and #3 wells are producing 31 MMcf/d and 1,052 bbl/d of condensate. Both wells have additional pay behind pipe.

Contango Oil & Gas Co. announced on Friday that over a recent period of time it has realized gains on its natural gas hedging position of over $3 million. “While we’re still bearish on the near-term outlook for natural gas, a major event like a Gulf of Mexico hurricane that damages offshore production facilities or an early cold snap similar to last year’s November and December temperatures would likely cause a sharp rise in natural gas prices,” said CEO Kenneth R. Peak. “In the event natural gas prices were to rise sharply, we would, of course, be exposed to losses on our current hedge positions. We believe the current risk/reward outlook weighs in favor of hedging a portion of our anticipated production for calendar year 2002 and 2003.” Contango is a Houston-based, independent natural gas and oil company. The company explores and acquires natural gas and oil properties primarily onshore in the Gulf Coast, offshore Gulf of Mexico and the Rocky Mountains.

©Copyright 2001 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.