Genel Energy PLC (LSE:GENL, OTC:GEGYY) said it has completed the testing of an appraisal well at the Sarta field, though it told investors that the primary reservoir objective flowed only water.
Other targeted intervals in the well flowed heavy oil, Genel added, and it said that the potential for long-term development of heavy oil resources would be assessed as part of the joint venture’s view of future Sarta field development.
The company, meanwhile, noted that Sarta’s initial field expectations are now unlikely to be met – based on the results of two appraisal wells and ongoing pilot production of around 4,000 barrels of oil per day – and as a result, it will now need to undertake an impairment review of the carrying value of the asset.
Further capital investment in Sarta remains contingent on the extent to which there can be confidence that such investment can add cash-generative production, Genel noted.