Scunthorpe well looks encouraging for Edgon, Europa and Union Jack oil
Sep 2, 2014 at 1:10 pm in AIM by contrarianuk
The onshore oil and gas sector of the UK has been controversial of late with the start of exploration using non-conventional fracking methods which have raised emotions amongst locals who are worried about the effects of well fluids on ground water, seismic disturbances and so on. Today Egdon Resources shares are up 5.4% to 25p, Europa Oil and gas holding are up 14% to 8.5p and Union Jack oil is up 12% to 0.35p after encouraging results from a conventional well in Scunthorpe, no fracking required for this one.
The Wressle 1 well has Egdon Resources UK as its operator and holds a 25% stake with Celtique Energie Petroleum, Europa Oil & Gas and Union Jack Oil holding 33.33%, 33.34% and 8.33% respectively. Preliminary petrophysical evaluation of the log data has indicated the presence of potential hydrocarbon pay in three main intervals with interpretation of potential hydrocarbon pay of over 30 metres thickness (measured). The well is currently being completed with a 4 ½” liner to enable selective and sequential testing of these intervals as part of an extended well test. Investors will have to wait until October/November for the flow rates, hydrocarbon type and hence commerciality of the well to be confirmed using a work over rig.
Wressle is a conventional hydrocarbon prospect located in the East Midlands Petroleum Province, 5 km southeast of and along the same structural trend as the Europa operated, Crosby Warren field which has been producing for almost 28 years. The Current well is part of the Lodge farm field which the companies predict could contain gross prospective resources of 2.1-2.4 million barrels of of oil.
The key question for shareholders is not only the flow rate but whether there is gas, oil or even water in the 3 reservoirs. So an encouraging result but plenty of question marks remain before the well can be termed commercial.
Contrarian Investor UK
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