--ADDS COMMENTS FROM Egdon Resources--
Europa Oil & Gas (LON:EOG) has told investors that one of the main zones of the Wressle discovery, in Lincolnshire, could be larger than it previously thought.
The oil and gas junior, which has been conducting an extended well testing programme, said that there has been no evidence of water from Zone 3A - also known as the Penistone Flags – and analysis indicates a deeper than expect oil-to-water contact point.
This potentially has “positive implications” for the possible volumes of oil and gas volumes contained within the zone, Europa said.
The company has, however, revealed that further tests are now needed and work-over activities are planned.
Separately though planned oil injection tests have yet to go ahead at Wressle due to uncertainty over permitting, and the company said it is seeking clarification from the Environment Agency to find out whether such operations are allowed under the current permit.
Work-over activities could also potentially boost recoveries from another potentially productive zone at Wressle, the Ashover Grit reservoir. It is now believed that rates seen in previous testing, flowing at 80 barrels oil equivalent and 47,000 cubic feet of gas, were impaired and the well could benefit from a ‘clean-up’.
“We are gaining a thorough understanding of the Wressle discovery which, during initial testing earlier this year, produced a total of 710 boepd from four payzones,” said chief executive Hugh Mackay.
“We are encouraged by the results of the EWT of the Penistone oil zone, which could be larger than first envisaged, and also by the analysis of well data for the Ashover, which suggests the free flowing oil production rates of 80 bopd and 47 mcf of gas per day could be improved upon.”
Currently operations at Wressle are now being wound down, to reduce costs to a minimum, before work resumes in the fourth quarter.
In the meantime, the company said work will focus on field development planning and permitting.
Europa added that reprocessed 3D seismic data for Wressle is anticipated shortly. The data should help planning activities, and could also reveal additional prospectivity in the area.
Mackay added: “The upcoming workover will provide valuable data as well as inform on how best to optimise oil production from the discovery.
“In addition, results are due on the reprocessing of existing 3-D seismic, which could identify additional prospectivity on the licence.
“All partners are committed to achieving early oil production at Wressle, which has the potential to significantly increase Europa’s existing UK reserves, production and revenues and I look forward to providing further updates on our progress.”
Europa has a 33.3% stake in the project, alongside partners including Egdon Resources (LON:EDR) and Union Jack Oil (LON:UJO) which own 25% and 8.3% respectively.
Egdon is the operator of the project.
Mark Abbott, Egdon’s managing director, in a separate statement said: "Development of the Penistone Flags reservoir will require careful positioning of any future well to optimise oil production from this interval in which we have seen a higher level of gas than in other reservoir intervals.
“The planned additional test is designed to gain the appropriate information in the most cost-effective manner whilst also evaluating radial drilling which is one of the potential development options being considered for this interval.
“We also look forward to determining the cause of the issue with the Ashover Grit EWT and to resolving this such that we will be able to determine the true potential for oil production from this interval."