Tuesday 17 March 2020

Byron Energy Limited is providing an update on the initial performance of the Company's SM71 F4 well.

The SM71 F4 well has now been turned over to production and the initial flow rates from D5 Upper Sand are consistent with the Company's expectations based on a comprehensive analysis of the electric logs from the well. The well is currently producing at a rate if 8.3 million cubic of gas per day. ("mmcfgdp") with a very low liquid yield and a flowing tubing pressure of 2,530 psi on a restricted 25/64 inch choke. The well has been in production now for about five days.

Because of the geometry of the trap, the F4 well was drilled very high on structure and intersected a small gas above an oil leg. Electric logs indicate the upper most portion of the D5 Upper Sabd is gas bearing and has the highest porosity and the permeability in the reservoir. Electric logs also indicate the lower portion of the D5 Upper Sand is oil bearing and has slightly less porosity than the upper portion of the reservoir. The entire D5 Upper Sand section was perforated and at the current gas rate, the Company expects it will take several months before potentially bringing the oil leg up into the cleaner high permeability sands.

At this stage. the behaviour of the SM61 F4 well is normal for a well with a gas-oil contact. The trap for the D5 Upper Sand is open to down dip water support, oil should continue to be pushed up to the SM71 F4 at the top of the structure. There are several nearby production analogues in SM72 and SM73 that support this scenario. Additionally, oil stained sand was found on the lower portion of the perforating guns when they were pulled out of the hole, which provides direct evidence of the presence of an oil leg.

Byron, through its wholly owned subsidiary Byron Energy Inc., is the operator of SM71 and currently has a 50% working interest ("WI") and a 40.625% net revenue interest ("NRI") in SM71. Otto Energy Limited Group (Otto) holds the remaining interest in SM71.

Otto elected not to participate in the SM71 F4 well, giving Byron a 100% working interest with an 81.25% net revenue interest in the well.

CEO Comment

Byron's CEO, Maynard Smith, commented:

"Having carefully reviewed the performance of similar wells in the area, we are comfortable that the initial flow rates of the SM71 F4 are consistent with other wells that logged both gas and oil in this section. It's interesting to note that the F4 gas production, at today's oil and has prices, is economically equivalent to about 500 bpod. Because this well is important to Byron we will continue to update the market regularly on the production performance of this well."