Oil shows in the Isobel Deep well, in the Falklands, are an inconclusive but positive indication, says Deutsche Bank.
Premier Oil (LON:PMO), Rockhopper (LON:RKH) and Falkland Oil & Gas (LON:FOGL) yesterday revealed that the well results would be delayed between ten and fifteen days after oil shows were encountered above the main target reservoir.
It comes after the first well in the current campaign, Zebedee, made a discovery.
At this stage it is still far too early to say Isobel is another new oil discovery - if confirmed it would be the third in the basin - and much more exploration is required.
Success here would, however, be very significant for the future development of the North Falkland basin.
Lucas Herrmann, analyst at Deutsche, says Isobel is arguably the highest potential prospect of the four Falkland wells that Premier Oil is involved in.
“In our view, oil shows are inconclusive at this stage but a positive indication that suggests source extends this far south in the basin,” the analyst said in a note.
“The well is testing the southern extent of the basin and success could establish a second, discreet hub, potentially equivalent in size to Sea Lion to the north.”
He also highlights that Isobel has the potential to enhance the appeal of the Falklands to potential new partners should Premier seek a farm-out to support its field development plans.
Further discoveries would also be a boost to the economics of other projects in the basin and would provide additional ‘optionality’ if there were any disposal talks in the future.