Indigo-Energy says that it is producing oil from its horizontal oil well, the "D-1," recently completed in the Illinois Basin. The well began flowing commercial grade oil about one week ago and is now consistently producing approximately 80 barrels per day. The Company believes that continued adjustments to the well and down-hole pump may cause increased production in the coming weeks. In addition to the oil production, this well is also producing natural gas at a flow rate of approximately 200 MCFD (thousand cubic feet per day). Because of this additional production development, a new gas line has been run to the well site so the natural gas can be gathered and sold simultaneously with the oil, making the D-1 both a gas and oil producing well.

INDIGO's President and CEO Steve Durdin stated, "I am thrilled to be able to share this exciting news with our shareholders today. The oil production we are announcing today along with the stability of oil prices over the past several months represent the continued fulfillment of the business plan for INDIGO's shareholders and drilling partners. Even at current production levels the Company anticipates an ability to liquidate the remaining payables associated with the initial drilling as well as begin to return a substantial profit by the end of next quarter."

INDIGO also announces that it has made significant progress in its efforts to clear all the hurdles to begin selling the natural gas from the three additional gas wells that were drilled and recently completed. A natural gas purchase agreement has been signed and the field gas samples submitted for quality testing have been completed and approved by the pipeline company. These procedures are in addition to other steps completed over the past two months including the completion of state regulatory inspections and the replacement of production hardware at the pipeline tap. In the coming days INDIGO will make some additional adjustments to the down-hole pump located in the vertical connector gas well, the "Hub," and anticipates flowing gas into the pipeline system shortly. As was announced at the end of March the company and its operating partners have already flared millions of cubic feet of natural gas during the testing and preproduction stage of this project and are eager to clear the last requirements to begin sales.

Durdin concluded, "As we make final adjustments in our natural gas production efforts we will continue to fulfill every step necessary to ensure maximum sustainable production and I believe we are very close to that point." Durdin added finally that, "We expect completion of these final steps and getting into production on the Hub well within the next two to three weeks."

Tags: Indigo-Energy