LGO Energy (LSE: LGO) known until early November as Leni Oil & Gas announced this morning that itseighth well in the Goudron field in south-eastern Trinidad (GY-671) reached a total measured depth of 3,598 feet on 6 December, and that its been electrically logged and cased for completion as a C-sand producer, with a net oil pay interval of 244 feet .
It also said that production from the well along with two others(GY-669 and GY-670) is expected to be brought online over the next few weeks, withGY-670 being the first to be completed.LGOs share price is up just over 2% at the time of writing.
The companysays that a newCompetent Persons Report (CPR) is currently being prepared using drilling results from eight wells GY-664 to GY-671 and will be published by Senergy (GB) Limitedin February 2015.
The last CPR, published in July 2012 byChallenge Energy Limited, showedover 30m barrels of proven, probable and possible reserves and over 63 mbarrelsof contingent resources at the Goudron field.
LGOalso announced that its signed a new contract withWell Services Petroleum Company Limited for the supply of Rig 70, a smaller more mobile unit equipped to drill to 4,000 feet with 5-inch pipe. Rig 70 will be used in LGOs2015 drilling programme and is expected toreduce the overall cost per well and may also enable new wells to be completed soon after they have been drilled.
Commenting on the news, CEO Neil Ritson said:
Given our successful drilling campaign we are naturally hopeful that the new CPR will show a significant increase on the reserves and resources previously announced. We are not expecting recent negative movements in oil price to impact the reserves as the project economics are very robust.
LGOs share price is now up 355% on this time last year, versus a fall of 13% in the AIM Al-Share index. But over the longer term LGO is actually trailing its index, with a rise of just 0.9% over the past five years, during wihich time the AIM All-Share has gained 9%.
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