13th Feb 2017 09:15
LONDON (Alliance News) - NU-Oil & Gas PLC on Monday said it G2 Energy Corp has completed due diligence on the EL1070 licence in western Newfoundland, Canada, following the option deal agreed last year.
NU-Oil signed a deal in December giving investment vehicle G2 Energy the option to earn 100% of the deep rights within the licence. If exercised, NU-Oil would retain a 5% gross overriding royalty from the project.
After completing its due diligence, G2 Energy is now starting work that needs to be completed in order to obtain a significant discovery licence. G2 Energy must achieve a flow test from one or more wells on the licence before the option expires on December 16, 2018, in order to secure that desired licence.
"G2 Energy has undertaken further analysis of data on existing wells, and has identified a potential bypassed oil pay zone behind casing in one of the wells on the licence, within the Carbonate Platform section, and its initial work programme, subject to regulatory approval, will plan to flow test this prospective zone," said NU-Oil.
"This section is interpreted to have a dense natural fracture network in brittle carbonate rocks, which may have natural flow capability," NU-Oil added.
NU-Oil shares were down 3.0% to 0.480 pence per share on Monday morning.
By Joshua Warner; [email protected]; @JoshAlliance
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