24th Jun 2024 12:57
(Alliance News) - Beacon Energy PLC on Monday said production at the SCHB-2 well was "substantially lower than expected".
The Isle of Man-based worldwide oil & gas exploration company reconnected the well, located in Germany's Erfelden field, to production facilities on June 12 following the demobilisation of the rig.
Beacon Energy shares were down 66% at 0.0046 pence each in London on Monday afternoon.
Incoming Chief Executive Officer Stewart MacDonald said: "While a stabilised flow rate has yet to be achieved, it is likely that production from the SCHB2 well will be in the 50–100 barrels of oil per day range, materially below expectations.
"The likely stabilised production rate indicates we have been extremely unlucky with the challenges encountered in the original well and our technical team are working diligently to understand these results against the reservoir characteristics derived from the electronic logs obtained."
According to Beacon Energy, the poor performance is likely a combination of residual reservoir damage and poor permeability in the particular area of the field where the well is located.
The company said it will now focus on implementing a cost reduction programme to match the cost base to expected production rates.
By Elijah Dale, Alliance News reporter
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