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Exploration and production minnow Irvine Energy (IVE:AIM) has achieved first output from its recently acquired project in Oklahoma. At 600 million cubic feet of gas a day, production is still relatively modest but the company is hopeful of increasing output by many multiples in the medium-term.

Along with its partner Metro Energy the firm is currently working up the 111,250 acres it owns in Oklahoma and Kansas. Irvine is focused on drilling shallow wells, targeting conventional reserves alongside shale gas and coal bed methane, for which there is good rig availability at a reasonable price.

The group plans to drill a total of 90 wells across the whole of its acreage by the end of 2009 and expects both its Niobara and Kansas oil projects to be on stream by the end of the first half.

The share price, which at 2.35p is hovering around its year low, should also receive a boost in April, when the company reports its reserves – as audited by consultant Netherland Sewell & Associates.

Managing director Aaron Close, describes the strategy as taking ‘small looks at big chunks of value’. He adds: ‘This is a transformational period for the company as we develop our targets in the US and enter the production phase.’

Shares says: Unlikely to provide huge excitement but should steadily build production.

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