21st May 2014 09:41
LONDON (Alliance News) - Northcote Energy Ltd shares rose Wednesday after it said that, having re-completed the first four existing well bores at its Zink Ranch Project, gas production has substantially increased.
The onshore US oil and gas exploration and production company said that its 8-A well alone is currently producing an additional 60 million cubic feet per day of gas.
Northcote Energy shares rose 11% to 0.640 pence Wednesday morning.
Northcote said that since re-completion, it has been monitoring the impact of the gas volumes and whether the incremental gas production would decline. However, it said that, as this has not occurred, it will now install a gas compressor and associated infrastructure to manage the higher volumes and monetise this increased gas production.
"As these are gas drive reservoirs, a significant increase in natural gas volumes is a positive indicator for future performance as an increase in natural gas volumes should portend an increase in the rate of oil recovery," said Chief Executive Randall Connally in a statement.
Northcote said that once in has completed the additional work, it expects the oil and gas production to stabilise.
"We believe that the new steel flow lines we will install next week as well as a compressor to move more natural gas will allow us to get good tests on these wells, and this will also support future planned field development at this site, which has a number of high impact development opportunities," Connally added.
The company's Zink Ranch Project is located in Osage County in the US state of Oklahoma.
North American Petroleum holds a 30% working interest in the wells, while Northcote has a 54% working interest.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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