LONDON (Alliance News) - Circle Oil PLC shares fell on Tuesday after it said that the latest well drilled on the Lalla Mimouna permit onshore Morocco encountered gas shows but that the reservoir quality has not met the company's pre-drill estimates, leading to the well being suspended for further analysis.
Circle Oil shares were down 6.8% to 8.97 pence per share on Tuesday morning.
The ANS-2 well was the second well to be drilled by Circle on the permit following on from the successful LAM-1 well. The ANS-2 well targeted the Miocene sands and the target depth of the well, at 1,070 metres measured depth, was reached at the end of June.
"Although the well encountered gas shows whilst drilling at the targeted depth, the interpretation of wireline logs indicates that the reservoir quality encountered in the well has not met the company's pre-drill estimates," said the company in a statement.
"Therefore the well has been suspended pending further analysis of all the data before a decision is made on whether or not to complete the well," Circle added.
The rig used on ANS-2 is now being moved to the NFA-1 exploration well, located in the southern part of the license, targeting two potentially gas-bearing zones in the Miocene sands. Initial results from that well are expected in the next 30 to 40 days.
"The ANS-2 exploration well has provided important data to help further our understanding of the Lalla Mimouna permit. We will now interpret this along with the results from the recent successful LAM-1 well test before we decide on whether to complete and test ANS-2," said Chief Executive Mitch Flegg.
The Lalla Mimouna permit is a partnership between the company's subsidiary, Circle Oil Morocco Ltd which holds a 75% stake and the Office National des Hydrocarbures et des Mines which holds the remaining 25% stake.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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