Providence shares surge by 11pc
SHARES in Providence Resources jumped more than 11pc yesterday after the company said it had completed drilling at a well in the UK and was now preparing it for production.
The oil-and-gas explorer said it had completed drilling operations on its new X8v lateral development well at the Singleton field in southern England.
Providence said the well was drilled as a new lateral to an existing well that was already producing, and targeted potential unswept reserves in the northern fault block of the field.
Analysis of down-hole log data confirmed the well had encountered 2,414 ft of gross hydrocarbon bearing interval, with some 2,316 ft of net pay.
The company described reservoir quality and hydrocarbon saturation within the pay zone as "excellent". Both wells are being prepared for production now. Providence operates just over 99pc of the site.
Providence technical director John O'Sullivan was pleased with the results so far.
"The success of the X8v lateral well has demonstrated our capability to drill multi-lateral wells on the Singleton field, which we believe will be a significant component of future field development planning.
"The well has encountered a massive porous hydrocarbon bearing section, in excess of our estimates, which is encouraging in terms of future production rates.
"We now look forward to completing the wells for production over the coming weeks, thereby providing incremental production at Singleton. This production data could significantly increase the potential recoverable reserves in this sector of the field," he added.
Job Langbroek, an analyst with Davy Stockbrokers, described the announcement as "encouraging".
By late afternoon in Dublin, Providence was trading up 11.03pc at €3.22.
Meanwhile, Petroneft's shares plunged nearly 10pc after the company said it would miss a target for oil production from a field in in Siberia. Petroneft said year-end production had reached 2,750 barrels of oil per day (bopd) from nine of the 11 wells drilled, missing their target of 4,000 bopd.
The firm said this was due to "formations damage" to the well from drilling. Fracture stimulation is slated for later this month. Fracturing, which adds cost, involves pulverising bedrock to free up the oil. It is said to be common in the region where the subsoil has low porosity. Despite the delay, Petroneft said it remained on target to hit its production target of 8,000 bopd by the end of this year and 12,000 by the end of 2012.
Separately, the firm said its board had approved an exploration well at nearby North Varyakhskaya following an oil discovery in the area last November and would drill 20 wells at its Licence 61 site this year.