San Diego-based Sterling Energy Resources Inc. has begun daily natural gas production from its Charlie Jacobs 2 and Jacobs Brumund 2 wells in Victoria County, TX. It also has begun drilling operations on the Boyne 1 well in Santa Barbara County, CA.

Sterling and its partners recently completed the Jacobs Brumund 2 well as a direct offset to the Charlie Jacobs 2 well already drilled. Both wells encountered natural gas in the Wilcox formation with current production from both wells at pipeline capacity of 8 MMcf/d. A new pipeline with 15 MMcf/d of capacity is now being built and is expected to be ready in about three months and more drilling locations are being evaluated.

In Santa Barbara, the Boyne 1 well, which lies in the Barham Ranch Field, will be drilled to a depth of 10,500 feet to test the lower Monterey formation in the field. Currently, there are 19 producing shallow Monterey formation wells that have produced more than 20 MMboe from depths ranging from 5,000 to 6,000 feet. If successful, Sterling geologists estimate field reserves in the deeper Monterey could exceed 50 MMboe.

Sterling, an integrated exploration and production company with core operations in Northern California, South Texas and northeastern Kansas, also announced that completion activities continue in the McLouth Field in northeast Kansas where natural gas injection lines have been installed and reconfigured on most of the existing leases. Sterling expects to add 10 newly drilled wells to production there in the next several weeks and then will begin working on 35 additional older shut-in well bores. Weather permitting, Sterling expects to have 70-80 producing wells in the McLouth Field by the end of the first quarter of 2002.

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