(Alliance News) - Shares in Predator Oil & Gas Holdings PLC dropped on Tuesday after the company said that testing at its Moroccan gas asset encountered "potentially deep" formation damage.
Predator is an oil and gas company with operations in Morocco, Ireland and Trinidad. Shares in the company were down 35% at 8.44 pence each in London on Tuesday.
This followed the company's announcement that phase 1 rigless testing had confirmed formation damage at its Moroccan onshore gas asset.
Predator said that testing of the MOU-1 and MOU-3 wells had encountered damage caused by heavy drilling muds. As a result, the company will now pursue phase 2 testing using a sandjet perforation tool, while adjusting the design parameters to account for the extent of the damage.
The company said that it remains confident that sandjet will be able to establish gas flow at the asset.
Gas samples collected while drilling at MOU-3 indicated gas composition in the range of 98.04% to 99.57% methane, which Predator said makes it "ideal for a compressed natural gas development with minimum processing".
Chief Executive Officer Paul Griffiths said: "The presence of potentially deep formation damage caused by heavy drilling mud has re-confirmed the necessity to test these zones for which the wireline logs are likely to have been impacted by the invasive drilling mud."
"Resources estimates remain unchanged and there are no changes to available discretionary working capital to carry out the sandjet testing programme. We are however fully aware that we need to flow gas from our main zones in the most effective manner after accounting for formation damage, and we have confidence in sandjet achieving that objective," Griffiths added.
By Hugh Cameron, Alliance News reporter
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