HILTON HEAD, S.C., Dec. 21, 2010 /PRNewswire-FirstCall/ -- Senetek PLC (OTC Bulletin Board: SNKTY) announced today that commercial production commenced in Texas from the Riggin #1 well in the Permian Basin. The well, in which Senetek holds a 15% working interest (11% net revenue interest) was drilled to a total depth of 10,426 feet to test the Mississippian formation. Total costs, including completion costs, were $1,144,638. Well logs indicated a pay zone in that formation, as well as over 26 feet of prospective pay up the hole in the Upper Spraybury formation.
In coordination with the operator, Breck Operating Company, the decision was made to begin by completing the pay zone in the Mississippian formation, which was done in late November. Since the initial swab tests, the well has produced 1,413 barrels of oil, with a minimal water cut. With adjustments for down time during completion, this represents an average of just over 58 barrels of oil per day. No reserves have yet been calculated for this zone.
Project geologists believe, based on the logs as well as visual observation, that the 26 feet of pay in the Upper Spraybury formation will also ultimately result in significant oil production. No decision has yet been reached as to the timing of a production test on this zone. The partners will commence drilling the second well on the project later this month. The Riggin Project could ultimately host over 30 well locations.
In other news, on December 13th the final date passed for bids on the Relief Canyon Mine assets to the Federal Bankruptcy Court in Reno, NV. An outside cash bid was received from Canarc Resources, a Vancouver B.C. based company for $11 million. Platinum Partners of New York City, which controls 65% of the secured debt, has elected to accept this bid, and expects a closing on or before February 4, 20111 should Canarc due diligence be completed positively. Senetek holds the other 35% of the secured debt.
This news release contains statements that may be considered 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act. Forward-looking statements by their nature involve substantial uncertainty, and actual results may differ materially from those that might be suggested by such statements. Important factors identified by the Company that it believes could result in such material differences are described in the Company's Annual Report on Form 10-K for the years 2008 and 2009 and subsequent Quarterly Reports on Form 10-Q. However, the Company necessarily can give no assurance that it has identified or will identify all of the factors that may result in any particular forward-looking statement materially differing from actual results, and the Company assumes no obligation to correct or update any forward-looking statements which may prove to be inaccurate, whether as a result of new information, future events or otherwise.
SOURCE Senetek PLC