Elk lifts oil, leaks profits

WYOMING-focused Elk Petroleum has boosted production 164% in the half-year to December, mainly thanks to a successful workover program at its Sand Draw South field in the Wind River Basin.
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Average daily output lifted from 86 barrels of oil per day to 227bopd, the company reported.

This result, in combination with strong oil prices, increased revenue 273% to $2.17 million and gross profit 218% to $982,272.

However, the company still reported a net loss of $1.17 million as a result of the write-offs associated with the unsuccessful shallow Grieve exploration well drilled halfway through 2007, loss on the sale of some oil field equipment, as well as expenses on some newly acquired acreage.

Despite the profit loss, Elk managing director Andy Rigg said he remained encouraged by the results.

"The results … demonstrate the value that can be derived from working over mature oil fields in the USA at a time when oil prices are high," he said.

"The latest figures demonstrate that if production and oil prices remain at average levels achieved in the last half-year, the US production operations are both profitable and also more than cover the costs associated with running the US production and exploration office in Caspar, Wyoming."

Looking ahead, Rigg said the company was still "keenly awaiting" the final Ryder-Scott reserves report on the proposed CO2 injection project for the Grieve field.