Iona Energy Announces Tyne T6 Well Flow Rate

Mon Jan 14, 2013 1:22pm EST

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Iona Energy Inc.

January 14, 2013 - 01:22:08 PM

Iona Energy Announces Tyne T6 Well Flow Rate

CALGARY, ALBERTA--(Marketwire - Jan. 14, 2013) - 

NOT FOR DISTRIBUTION TO UNITED STATES NEWS WIRE SERVICES OR DISSEMINATION IN
UNITED STATES

Iona Energy Inc. ("Iona" or the "Company") (TSX VENTURE:INA) is pleased to
announce today that the 44/18-T6 ("T6") well on the Tyne Gas Field has been
completed as a production well and has successfully flow tested at an average
rate of 25 million standard cubic feet per day ("MMscf/d") with a peak rate of
28 MMscf/d during an 8 hour production test. The well has been handed over for
production operations and the rig is preparing to leave the Tyne area. Iona
owns a 20% non-operated working interest in both the Trent & Tyne Gas Fields
with an option to increase interest in both fields to 37.5%. 

As of December 31st, 2012 both Trent & Tyne Fields were producing at a
combined production rate of 20MMscf/d, net 4MMscf/d to Iona. The contribution
from T6 raises the potential gross field production of both Trent & Tyne to
48MMscf/d, net 9.6MMscf/d, at its 20% working interest. Iona has notified the
Operator that it intends to exercise its option to increase its interest in
both fields and plans to announce at the earliest opportunity the completion
of this transaction, which is subject to third party approvals, and has an
economic date enabling Iona to fully benefit from the higher combined
production from the two fields with the higher 37.5% interest. On the day of
the production test UK Natural Gas prices were USD$10.89 per thousand cubic
feet ("Mcf").

The T6 well was drilled as a side-track from the dormant production T5 well to
a location higher up structure and to the north of T5 within the same
production compartment. The T5 well had previously produced gas at rates of up
to 25MMscf/d from a 50 foot gas column close to the gas water contact ("GWC")
and had been shut in due to water encroachment. As planned, the T6 side-track
encountered top reservoir 57 feet higher than T5 and 107 feet above the
regional GWC. T6 was drilled at a high angle through the reservoir and
encountered 92 feet of gas pay. Only the uppermost 30 feet of this pay
interval was perforated, in order to maximize the standoff from the underlying
water. At the end of a 12 hour clean-up period, the T6 well was flowing at
28MMscf/d of dry gas, which exceeded management's expectations given the
relatively short perforated interval. 

Pressure testing of the reservoir has confirmed that T6 lies within a
different reservoir compartment from production well T3 and is expected to
recover new reserves. Gaffney Cline & Associates Ltd. ("GCA") have estimated
the incremental proven plus probable reserves net to Iona to be 4.8 Bcf from
T6 at an initial gross flow rate of 20 MMscf/d, with a net upside case of 6.4
Bcf of proven plus probable plus possible reserves (reserves estimates
effective as of December 31, 2011). 

Upon acquisition of the 20% interest in the Trent & Tyne Fields, Iona
committed to fund the drilling and completion of the T6 well at a capped net
cost to Iona of GBP 21.2 million (approximately USD$32.9 million). 

Iona's Chief Development Officer, Dave Sherrard, commented: "Further
side-track opportunities have been identified in the other producing
compartments of the Tyne field and our new 3D seismic data, currently being
processed, is expected to identify yet more opportunities on the western side
of the field".

Iona's Chief Executive Officer, Neill Carson, commented: "We set out to own in
our portfolio net production of 6,000 boepd by the end of 2012. We are pleased
to be close to this aspiration target, believing we can ultimately reach over
2,500 boepd net production from these gas assets in 2013 in addition to 5,000
boepd expected from the Huntington acquisition in H1 2013".

Additional information relating to the Company is available on SEDAR at
www.sedar.com.

About Iona Energy:

Iona is an oil and gas exploration, development and production company focused
on oil and gas development and exploration in the United Kingdom's North Sea.

Forward-looking statements

Some of the statements in this announcement are forward-looking, including
statements regarding Iona's plans with respect to increasing its working
interest in Trent & Tyne, as well as estimates of the quantities of proved
reserves, probable reserves, and possible reserves. Forward-looking statements
include statements regarding the intent, belief and current expectations of
Iona Energy Inc. or its officers with respect to various matters, including
Trent & Tyne reserves, production, drilling activity or otherwise. When used
in this announcement, the words "expects," "believes," "anticipate," "plans,"
"may," "will," "should", "scheduled", "targeted", "estimated" and similar
expressions, and the negatives thereof, are intended to identify
forward-looking statements. Such statements are not promises or guarantees,
are based on various assumptions by Iona's management and are subject to risks
and uncertainties that could cause actual outcome to differ materially from
those suggested by any such statements. These forward-looking statements speak
only as of the date of this announcement. Iona Energy Inc. expressly disclaims
any obligation or undertaking to release publicly any updates or revisions to
any forward-looking statement contained herein to reflect any change in its
expectations with regard thereto or any change in events, conditions or
circumstances on which any forward-looking statement is based except as
required by applicable securities laws. 

Notes Regarding Oil and Gas Disclosure 

Readers are cautioned that well flow test results are not necessarily
indicative of long-term performance or of ultimate recovery. The production
rates and related revenue estimates set forth in this press release are
estimates only and the actual production rates and realized revenue may be
greater or less than those calculated. As used in this press release,
"possible reserves" are those additional reserves that are less certain to be
recovered than probable reserves. There is a 10% probability that the
quantities actually recovered will equal or exceed the sum of proved plus
probable plus possible reserves.

Additionally, this press release uses certain abbreviations as follows:



Natural Gas                                                                 
----------------------------------------------------------------------------
                                                                            
Mcf          thousand cubic feet                                            
                                                                            
MMscf        million standard cubic feet                                    
                                                                            
Bcf          billion cubic feet                                             
                                                                            
boepd        barrels of oil equivalent per day                              



FOR FURTHER INFORMATION PLEASE CONTACT: 
Iona Energy Inc.
Neill A. Carson
Chief Executive Officer
+011 (44) 1224 228400


Iona Energy Inc.
Brad G. Gunn
Chief Financial Officer
(403) 775-7442




        

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