LONDON (Alliance News) - Egdon Resources PLC on Wednesday said drilling of the Biscathorpe-2 well at the PEDL253 licence in Lincolnshire did not produce the desired result.
Shares in Egdon were down 22% at 6.25 pence on Wednesday.
Preliminary analysis indicated a thickened basal westphalian sandstone reservoir in the well location but this was not the case, Egdon, which owns a 35.8% interest in the licence, said adding that the Biscathorpe prospect play has therefore "not been properly tested by the well".
It is expected that the reservoir may "be more thickly developed to the north and north-east of Biscathorpe-2 location", the company said.
More positively, elevated gas and oil shows were supported by oil saturation in the dinantian carbonate over a 99 metre interval which indicates "proximity to an effective petroleum system". However the formation is not sufficiently porous to make an effective reservoir.
Porous sandstone reservoir intervals were found in the westphalian sequence but these were all water wet.
The open hole section will be sealed and the well will be suspended with the option for a future side track, Egdon said.
"Although the Biscathorpe-2 well did not encounter the thickened basal westphalian sandstone as predicted, we are encouraged by the presence of shows in the underlying dinantian limestone which demonstrates a functioning petroleum system and we will now take some time to incorporate the results of the well into our prospect model before deciding on the future strategy for further evaluating the Biscathorpe prospect," said Egdon Managing Director Mark Abbott.
Union Jack Oil PLC, owner of a 22% PEDL253 licence interest, noted Egdon's announcement.
"As conveyed in the operator's narrative, the Biscathorpe-2 well has been suspended for a possible side-track at a later date once the results of the well have been incorporated into the prospect model," said Union Jack Executive Chair David Bramhill.
"Union Jack's balanced portfolio remains active with the imminent drilling of the high-impact West Newton-2 appraisal well, followed by the Wressle appeal being heard in respect of a production development decision. Both of these are material projects and success in either of these projects will offer significant value upside to Union Jack," Bramhill added.
Shares in Union Jack were down 35% at 0.084p on Wednesday.