Aminex hits oil and gas bearing sands in OM-1 well at Shoats Creek, shares surge

Aminex (AIM: AEX) said that wireline logs from the Olympia Minerals-1 (OM-1) well at Shoats Creek, Louisiana, have identified several potential oil and gas bearing intervals in Cockfield sands between 8,200 and 9,335 ft, which closely match the prognosis obtained by interpretation and mapping of new 3D seismic over the property.

OM-1, which has reached a total depth of 9,508 ft (feet), has been cased and will undergo a testing programme shortly, starting with the perforation of an interval at 9,320 ft. This was the first well in a drilling programme based on interpretation of new 3D seismic data over the property.

The well will be placed on commercial production from one or more zones following the test results.

“OM-1 is the first new well to have been drilled by our US subsidiary as operator for several years, encountering the Cockfield sands exactly as anticipated...Shoats Creek has been a dormant asset of the company for many years with only limited production but the new 3D seismic is now allowing us to begin exploiting its full potential which should transform our US producing operation,” said chairman of Aminex Brian Hall.

OM-1 was spudded in February, a month after the spudding of the Likonde-1 well at the Ruvuma PSA (production sharing agreement) in southern Tanzania, which is operated by FTSE 100 constituent Tullow Oil (LSE: TLW) and 37.5% owned by Aminex. Another partner in the project, Solo Oil (AIM: SOLO), holds a 12.5% interest in Likonde-1.

Aminex, which holds a 100% working interest in OM-1 through its subsidiary Aminex USA, plans further drilling at this year, considering drilling a well to test the deeper Wilcox sands identified by 3D seismic.

The 2010 drilling programme also includes the spudding of the Frio well at Shoats Creek in March, the Sunny Ernst-3 well at Alta Loma, Texas in June as well as a provisional follow-up well at Ruvuma and a Nuyuni follow-up well in the final quarter of the year or early 2011.

The Aminex-operated Shoats Creek property covers 1,570 acres in Beauregard Parish, Southwest Louisiana, close to the Texas border. Shoats Creek is made up of proved, undeveloped reserves in Frio and Cockfield sands with deep exploration potential in Wilcox sands, all of which have now been extensively remapped and integrated with existing well data using the 3D seismic.

The Wilcox sand is a prolific oil producer in the Gulf of Mexico region but has never been produced in this field.

Late last year, equity research and corporate finance firm Astaire Securities gave the company a risked exploration value of a further 14 pence per share for a total NAV (net asset value) of 27 pence, excluding the company’s West Songo-Songo hydrocarbon project in Tanzania, where volumetric evaluations are at an earlier stage, and Egypt, which provide additional exploration potential.

Shares in the company were up nearly 14% on the news in London early afternoon trade.