LONDON (Alliance News) - The companies involved in the Wressle oil discovery in the East Midlands on Thursday said they believe it can push forward with the field development plan for the project without having to carry out any further "time-consuming and costly" testing operations.
The companies believe the tests it has already carried out on the discovery are sufficient and said they think the Ashover Grit interval could produce over 500 barrels of oil per day, compared to the 80 barrels per day achieved from its flow test.
Egdon Resources operates the PEDL180 licence where the oil discovery sits with a 25% stake, alongside fellow AIM-listed stocks Europa Oil and Gas (Holdings) PLC with a 33.3% stake and Union Jack Oil PLC with an 8.3% stake. Celtique Energie holds the remaining balance of the licence.
The partners were originally planning on conducting further tests on the Ashover Grit and Penistone Flags intervals at the Wressle discovery but has since completed an extended well test that has given them confidence that no further testing is now required.
"The group has completed a detailed review of the data gathered to date and are now sufficiently comfortable to continue working towards compiling a field development plan without requiring further time-consuming and costly testing operations," said Egdon.
Previous tests on the Ashover Grit interval at the discovery achieved a flow rate of 80.0 barrels of oil per day, but this was hampered by damage to to the well bore formation, meaning the test was "not representative of the flow rates that could be attained".
If it can resolve the problems with the well bore, the companies have estimated the Ashover Grit interval could produce over 500.0 barrels of oil per day.
"It is therefore the joint venture's intention that plans for the development of Wressle will include a comprehensive suite of operations and procedures, designed to mitigate the impact of the 'Skin' on production rates, which form part of the initial workover programme for the well to prepare it for long-term production," said the companies in separate statements on Thursday.
The field development plan for the Wressle discovery is expected to be completed in the first quarter of 2016, followed by submission of planning and permitting applications to North Lincolnshire Council and the Environment Agency.
"We are now focussed on delivering the required consents to enable us to commence commercial oil production from the Ashover Grit in the second half of 2016," said Egdon Managing Director Mark Abbott.
"We are highly encouraged that reservoir engineering analyses indicate initial production rates in excess of 500 barrels of oil per day could be achieved from the Ashover Grit interval at Wressle. Were production to come in at or around this level, our 33% interest in the field would transform our existing production, reserves and revenue profile," said Europa Chief Executive Hugh Mackay.
Egdon shares were down 4.8% to 10.0 pence per share on Thursday morning whilst Europa shares were up 22% to 4.10p. Union Jack shares were up 14% to 0.234p.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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