26th Jun 2014 09:58
LONDON (Alliance News) - Hurricane Energy PLC shares soared on Thursday after it successfully completed the testing of a horizontal appraisal well at its Lancaster fractured-basement oil discovery off the west coast of Shetland.
Hurricane Energy shares were up 46% to 43.15 pence, putting it top of the AIM All-Share risers on Thursday.
The newly listed UK oil and gas development and production company said production tests at the site achieved a sustainable oil flow rate of 9,800 stock tank barrels of oil per day, and testing has now been suspended as it becomes a future producer.
The Lancaster Field, which is 100% owned by Hurricane, has estimated 2C Contingent Resources of 207 million barrels of oil equivalent.
The programme was designed to show that commercial hydrocarbon flow rates could be achieved from a horizontal well through fractured basement rock.
"I am delighted to report the successful completion of our testing operations which have achieved hydrocarbon flow rates in the upper range of our pre-drill estimates," Chief Executive Robert Trice said in a statement.
The company, which joined London's AIM market in February, is hoping to go into production of a significant material resource off the Shetland Islands in the coming years as a UK government pilot initiative has identified fractured basement reservoirs as a key opportunity in the UK energy development sector.
Fractured basement reservoirs are deep rock structures that have been naturally fractured by earthquakes and tectonic forces, and are as long as two and a half billion years old. The oil resides in the cracks that have formed between the rocks, rather than being contained in the rocks as with traditional sandstone reservoir oil plays.
Fractured basement reservoirs sites are closely associated with large oil plays such as the Bach Ho field offshore Vietnam, which has 1,450 million barrels of oil reserves, and the La Paz fractured basement in Venezuela, which has 678 million barrels of reserves.
By Tom McIvor; [email protected]; @TomMcIvor1
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