Shares in IOG PLC (AIM:IOG) crashed 41% to 3.95p after it revealed a potential mechanical blockage downhole found during well clean-up and testing operations at the Blythe H2 well in Saturn Banks project in the UK Southern North Sea, which continued to be below the initial gas flow rate.
With no faults or fractures encountered, the company said it was an improvement on the current rate from the Blythe H1 well, but below the expected rate of 30-40 mmscf/d.
IOG said it was mobilising equipment "in the coming weeks" to assess and potentially rectify the potential mechanical blockage.
Commissioning is still expected to be brought onstream this month, with completion of the H2 hook-up expected to take another week.
Drilling of the H2 well to a depth of 13,400 feet indicated "better reservoir quality" in terms of permeability and porosity, with a maximum dry gas flow rate of 22.8mln standard cubic feet per day (mmscf/d) and 280-336 barrels of condensate per day at the export pipeline pressure of 1250psi, with no formation water observed.
"Once H2 production is on, H1 is planned to be shut in; in a higher gas price environment it could be possible to reopen H1 at lower rates to minimise water production," the company said.