One of the UK private investors’ favourite speculative shares, Victoria Oil and Gas [AIM : VOG] has issued disappointing news following the drilling of exploration well 66.
VOG have confirmed that after drilling Well 66 to a depth of some 1100 metres, whilst oil saturations were found, they were not of commercial value.
As a result of this setback, the VOG technical team have decided to delay the spudding of further wells until they have re-evaluated the seismic data from the field, using information gleaned from the recent drilling.
VOG expect the review to be completed during Q1 2008.
Tony Porter, CEO of Victoria Oil & Gas, said today, 'We have found oil in all the wells we have drilled, which shows that the source rock for hydrocarbon generation is present throughout the field. The challenge now is to concentrate further evaluations on trap and seal. The licence block covers a large area of 65 square kilometres and still has significant potential for future discoveries.'
The company have also updated the market in respect of production from Wells 20 and 73, where the combined production currently stands at around 300 barrels of oil per day. The recent increase has been assisted by the installation of a PCP at Well 73, and there is scope the production rate ‘significantly’ by increasing the speed and capacity of the pumping equipment in the future.
Porter added, 'Activity to maximise production from Wells 73 and 20 is ongoing and both have responded well to pumping. With the right equipment we would expect to see a material increase in production from the current levels'.
VOG fell 15% on the news, and is currently trading at an all time low of around 17p per share.