The well is flowing under its own pressure through a 7/32-inch choke at a wellhead pressure of 660 psi, without any water or sand production.

The second development well, GY-665, which has an anticipated total depth of 3,500 feet is now at the intermediate casing point at 1,606 feet and has intersected approximately 310 feet of gross oil sand in the Goudron sandstones.

Neil Ritson, LGO’s Chief Executive, commented:

"This is a very significant outcome and I am sure it will be completely transformational for the field and the Company. As the first new production well on the field for over 30 years, GY-664 was drilled with an on-balance mud system and completed with modern tubing conveyed guns. The initial flow rate demonstrates the value of this approach; exceeding the historic averages four-fold. We fully expect many more similar results as the drilling campaign progresses and indeed well GY-665 is already showing considerable potential."

GY-664 Oil Production:

A 278-foot section of the Gros Morne sandstone member of the Moruga Formation was perforated using tubing conveyed (TCP) guns between 2,177 and 3,205 feet. The TCP guns were fired at 08:25 hours (Trinidad local time) on Friday, 30 May 2014.

The well was completed with 2 7/8-inch production tubing and after perforation it initially flowed naturally at a rate up to 326 barrels of oil per day ("bopd") through a restricted choke and has now been stabilized at a rate of 240 bopd after running a number of flow tests at various choke settings.

The well has been flowing through a 7/32-inch choke at a wellhead pressure of 660 psi. Production at this rate has been stable for the last 36 hours with wellhead pressures remaining constant at between 660-700 psi.

No attempt has been made to open the choke to allow unrestricted flow. The flow rate is being deliberately restricted in order to maximize the long-term production potential from the well and to avoid any potential damage to the reservoir or the acceleration of water production.

Initial pre-drill flow rate assumptions were of at least 60 bopd based on historic data from the field, however, the improved drilling and perforating practices used have greatly assisted in reducing formation damage and improving oil inflow characteristics.

GY-665 Update:

Well GY-665, the second of 30 new development wells is in the process of being logged before setting casing at the base of the Goudron sands at a depth of 1,606 feet.

The well has encountered the anticipated oil bearing Goudron sandstones with approximately minimum of 310 feet of gross oil pay based on the mud logging. After casing has been set, the well will be drilled to the primary target in the Gros Morne sandstones.

Well GY-665 is approximately 800 feet south-west of the GY-664 and is the first of four planned wells from the same drill pad. GY-665, has a planned total depth of 3,500 feet and is anticipated to intersect with all three prospective reservoir intervals; the Goudron, Gros Morne and Lower Cruse, and is expected to encounter the Lower Cruse at around 3,000 feet.

Wells GY-664 and GY-665 are separated by a known fault zone with the Lower Cruse reservoir anticipated to be structurally shallower in GY-665.