(Alliance News) - Beacon Energy PLC on Monday said it could achieve high rates of production from its Schwarzbach-2(2.) well thanks to recently-discovered oil-bearing reservoirs, despite repeated programme delays.
However, the stock was down 22% at 0.21 pence in London on Monday morning.
The Germany-focused upstream oil & gas company announced in August that its subsidiary, Rhein Petroleum GmbH, had found an "excellent" 34-metre gross interval containing 28 metres of oil-bearing net reservoirs within the onshore Erfelden field in southwestern Germany.
Beacon said the reservoirs, within the Stockstadt Mitte segment, were about 25 metres high and ten metres thicker than prognosis with porosities averaging 21% in the Upper Pechelbronner-Schichten sandstones and 18% in the Lower PBS.
"As all these metrics are above or at the top of the range of pre-drill expectations, the likelihood is that this will result in a material upgrade to recoverable reserves in Stockstadt Mitte," the company explained.
Beacon said it could potentially achieve an initial production rate in excess of 900 barrels of oil per day based on light oil already recovered, alongside the reservoir's "excellent" properties.
However, Beacon said it must now release the drilling rig due to delays in the programme. Clean-up will continue on site.
Beacon intends to update existing development plans "with the aim of accelerating drilling and maximising the value of this highly attractive asset". A planned rod pump, with the capacity to deliver up to 250 bopd, is expected to be installed in October.
"The [Schwarzbach-2(2.)] well has been a challenging well from an operational perspective, with hole stability issues encountered in the initial and sidetracked hole sections," commented Chief Executive Officer Larry Bottomley. Data gathered during drilling, however, "indicates the potential for substantial reserve and production upside for the Stockstadt Mitte segment...which clearly bodes well for the long-term value we believe we can realise from the asset."
Bottomley continued: "While the delay to fully understanding the production potential of this well is frustrating, the sub-surface results far exceed our pre-acquisition and pre-drilling expectation and we therefore remain pleased with the overall results of the SCHB2(2.) well and look forward to providing an update in due course."
By Emma Curzon, Alliance News reporter
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Beacon Energy. (BCE)