(Alliance News) - Beacon Energy PLC said on Thursday that drilling fluid leaks had significantly impeded oil production at one of its German assets.
Beacon energy shares were down 17% at 0.084 pence each in London at midday.
The Isle of Man-registered oil and gas company has completed the installation of a rod pump on its Schwarzbach-2(2) well at the Erfelden site south of Frankfurt. However, the group has since reported low production rates of 40 barrels of oil per day. According to Beacon, this indicates restricted flow rates caused by drilling fluid leaking into a reservoir near the well bore.
Beacon claims that the well "continues to clean-up, albeit currently at a slow rate", and says it will undertake "industry-standard well stimulation" in January 2024 in order to improve production.
The company says it is fully funded to undertake the operation, which will take around one week at an estimated cost of EUR500,000.
A pressure build-up test is also currently underway, the data from which will inform their understanding of formation pressure in the well and fluid invasion around the well bore.
Despite the disruption, Beacon estimates that the well could yield up to 900 bopd, which would deliver operating cash flows of around USD1.5 million per month assuming USD80 per barrel.
Beacon's Chief Executive Officer Larry Bottomley said: "It is not uncommon for wells to take extended periods of time to clean up, and we remain confident that the well will produce at higher rates either through natural clean-up during production or once we execute the remedial works."
By Hugh Cameron, Alliance News reporter
Comments and questions to newsroom@alliancenews.com
Copyright 2023 Alliance News Ltd. All Rights Reserved.
Beacon Energy. (BCE)