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LONDON (Alliance News) - San Leon Energy PLC saw its shares slide early Thursday after it noted that Genel Energy PLC, the operator of the Sidi Moussa licence offshore Morocco, was plugging and abandoning the SM-1 well on the block after failing to produce oil at sustainable rates.
San Leon holds a 10% net working interest in the Sidi Moussa block.
In a separate statement, Genel had said it had drilled the SM-1 well to a total depth of 2,825 metres and encountered oil in fractured and brecciated cavernous Upper Jurassic carbonates. In the course of well control operations 26 degree API oil was produced to surface, it said.
However, a subsequent testing program over the same interval failed to produce oil at sustainable rates, potentially as a consequence of the reservoir damage suffered during drilling and well control operations, Genel said. Further evaluation of the well results and other subsurface information is required before any definitive conclusions can be drawn, it added.
"Analysis of the oil recovered, and the suite of data from drilling, logging and testing, provides a good platform for evaluating the potential of the Sidi Moussa licence and its various prospects. This evaluation work will begin immediately," San Leon Chairman Oisin Fanning said.
San Leon shares were down 20.0% at 1.42 pence early Thursday, one of the worst-performing stocks on the AIM All-Share index. Genel Energy shares were down 1.5% at 810.00 pence.
By Steve McGrath; stevemcgrath@alliancenews.com; @stevemcgrath1
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