Silvermere Energy provide an update covering production and sales of oil and gas during January 2013 from the I-1 well on its Mustang Island 818-L Field. This is based on information provided by the Operator, Dominion Production Company LLC (Dominion).

Following the previously announced re-opening of the third party transmission line on 07 January 2013, total production and sales of gas recorded during the month were 8,680,000 standard cubic feet (scf). Total production of oil was 1,780 barrels. It is expected that the oil charge of the pipeline will be completed within the next month so that sales and production numbers for oil will begin to converge.

Operations during the month were interrupted a few times by the need to clean up accumulated drilling mud and debris from the platform equipment and it is clear that the well remains in clean-up phase. The Company still awaits a longer period of sustained continuous flow, but production experience to date supports previous guidance provided which was for commercial flow rates of 155 bopd plus 700,000 scfpd of associated gas, and no water. This is equivalent to a total flow rate of approximately 270 boepd using standard industry conversion factor of 6,000 scf/boe.

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