The Ship Shoal 201 A-6 well was successfully drilled and completed during the quarter ended 31 March 2010. The Company reports that the well was placed on production on 6 May 2010 at a gross rate of 1,615 boepd (1,295 boepd net) (83% gas). This has resulted in a material increase in the Company's average daily production rate.

As previously reported, the Ship Shoal 201 A-6 well was drilled from the recently acquired Ship Shoal 202 'A' platform. Drilling and completion operations were finished ahead of schedule and within the $9.8 million budget allocated for the well. In order to bring production online, processing equipment was installed on the Ship Shoal 202 platform and the product sales line was recommissioned. Independent reservoir auditing firm, Collarini Associates of Houston, Texas, attributes net 1P reserves of 1.1 million boe and 2P reserves of 1.3 million boe to the reservoir (84% natural gas). The Company has a 100% working interest and an 80.2% net revenue interest in the well.

Sorrento Dome The Company has continued to carry out work at Sorrento Dome to enable commencement of production from the United Lands 14-1 well. Production from the United Lands 14-1 well will commence once the installation of the sales gas meter is completed and the non-productive United Lands 11-1 well is converted to a salt water disposal well. As previously reported, this well tested at a stable but restricted gross rate of 217 boepd (160 boepd net) (100% gas). Installation of the gas sales meter has started and is expected to be completed during the quarter ending 30 June 2010. The conversion of the United Lands 11-1 well is expected to be finished before the sales meter is installed.

The next drill-ready target at Sorrento Dome is the United Lands 13-1 sidetrack well. This is a sidetrack of an existing shut-in well and targets proved undeveloped reserves. The Company is currently assessing when this drill-ready project can best be placed into the Company's drilling schedule.

Eugene Island 183/184 During the three months ended 31 March 2010, the Company continued to work hard to overcome well performance issues at Eugene Island. The Company estimates that net attributable production from the Eugene Island field for the quarter ended 31 March 2010 averaged 806 boepd (1,304 boepd gross) (56% gas).

The Eugene Island A-8 well continues to flow at approximately 369 boepd gross from the Mid Tex zone. This zone is expected to deplete shortly, at which time the Company will recomplete the well to the T-1 zone. The Company anticipates a substantial improvement to production flow rates from the A-8 well following the recompletion.

As previously reported the Eugene Island A-6 well plugged with sand and remains shut in. The Company plans to perform low cost remedial work on the well to attempt to re-establish production in conjunction with the A-8 recompletion.

During the quarter ended 31 March 2010, the Eugene Island A-7 well, after over 4 months of steady production, plugged with sand and is currently shut in. The Company is working towards recompleting the well further uphole to access reserves in a shallower horizon. It is expected that this recompletion work will be completed within three weeks.

After installation of the compressor, the production rates from the legacy gas-lifted oil wells at Eugene Island (A-1, A-3, A-4, and A-5 wells) has improved, performing at the targeted aggregate gross rate of 300 to 500 boepd (187 to 375 boepd net) (100% oil).

Grand Isle 96 The Company successfully bid for the Grand Isle 96 block which is adjacent to the Company's Grand Isle 95 and 100 blocks. The Company has identified several drilling prospects on this lease and believes that operational synergies will enhance the economics of the prospects on all three Grand Isle leases. On 13 April 2010, the MMS confirmed acceptance of Leed's bid.

Non-Operated Properties Production at Main Pass 64 averaged 90 boepd (100% oil) on a net revenue interest basis (469 boepd gross) during the quarter ended 31 March 2010. The third party oil sales line was restored to operation during the period, and production over the first ten days of May averaged 184 boepd (100% oil) on a net revenue interest basis.

Production at the non-operated East Cameron 317 field averaged 63 boepd on a net revenue interest basis (333 boepd gross) during the quarter ended 31 March 2010.

The Company estimates that net attributable production for the quarter ended 31 March 2010 averaged 958 boepd. The lower average daily production for the period was primarily attributable to cessation of production in the previously producing zone of the Eugene Island A-7 well.

The accident at the BP leased Deepwater Horizon Rig in the Gulf of Mexico has had no immediate impact on the Company's current operations. Both of Leed's major producing fields, Eugene Island 183/184 and Ship Shoal 201, are located over 150 miles to the west of the accident site. On May 6, 2010, U.S. Department of Interior Secretary Ken Salazar, who has responsibility for the MMS, stated that the agency will temporarily suspend the issuance of drilling permits for offshore wells. The suspension of the issuance of drilling permits will not have any affect on Leed's operations provided that the Department recommences the issuance of such permits by the third quarter of 2010, which is when Leed plans to commence the drilling of the South Marsh Island block 8 prospect.

Howard Wilson, President and Chief Executive of Leed Petroleum PLC, commented, 'We are pleased to report the commencement of production at Ship Shoal block 201 and look forward to finalising enhancement activities at Eugene Island during the next quarter. Our aim is to increase production materially in the upcoming period, and this will significantly improve the Company's revenue and cash flow.'

Tags: Leed Petroleum PLC