Beacon Energy PLC (AIM:BCE) shares plummeted in Monday’s early deals on the results of the Schwarzbach sidetrack well, at the Erfelden field, in Germany, which has seen production rates significantly below expectations.
The company, in a statement, told investors that performance during testing indicates that production from the new sidetrack well will stabilise between 50 and 100 barrels of oil per day.
It said the most likely explanation for the poor performance is a combination of residual reservoir damage and poor permeability in this particular area of the Erfelden field.
At the same time, Beacon flagged that amid current financial uncertainties the company may not finalize and publish its annual report for the year ending 31 December 2023, by the June 30 deadline, in which case its shares would be suspended on 1 July (next Monday).
“This is a hugely disappointing outcome for all stakeholders given the very encouraging results obtained from the electronic logs,” chief executive Stewart MacDonald said in a statement.
“The likely stabilised production rate indicates we have been extremely unlucky with the challenges encountered in the original well and our technical team are working diligently to understand these results against the reservoir characteristics derived from the electronic logs obtained.”
MacDonald added: “The company will now look at a range of options to reduce costs within the business, maximise cash generation and assess next steps."
In London, Beacon shares fell 66% in early deals to trade at 0.005p.