Cairn Energy PLC (LON:CNE) has hailed the results from its SNE-4 appraisal well off the coast of Senegal.
It is the fourth successful appraisal well on the SNE oil discovery, Cairn said, as it revealed details of early analysis of the dataset from the drilling of the well.
The company said drilling had confirmed the extension of reservoirs in the eastern extent of the SNE field, more than five kilometres (km) to the east of, and down-dip of, SNE-3.
Drilling also confirmed oil-bearing upper reservoir sands of similar quality to those encountered as gas bearing elsewhere in the field.
The uppermost gas sands first encountered in SNE-3 and BEL-1 were also present and gas bearing in SNE-4, Cairn revealed.
A gross oil column of around 100 metres was encountered, similar to the SNE-1, SNE-2, SNE-3 and BEL-1 wells.
“Reservoir quality and oil characteristics (32⁰ API) are similar to that found elsewhere in the field,” noted stockbroker Mirabaud Securities.
“Furthermore, all the principal reservoir units are present in the well and appear to correlate with other wells across the field. To establish the extent of connectivity in the upper reservoir units, gauges have been installed in SNE-3 and SNE-4. Notably, this well ends the current phase of appraisal with the Sangomar partners electing to release the Ocean Rig Athena drill ship post completion of SNE-4. This will allow some thinking time to consider development options and determine the best approach for the next phase of appraisal drilling which is anticipated to commence in H2,” the broker added.
“The new report, to be published later this quarter, will incorporate the results of BEL-1 and SNE-4. These wells have provided greater confidence in the extent of the upper reservoir units and should lead to a narrowing of the current resource range (240-468-940 mmbbls),” the broker added.
Cairn's chief executive Simon Thomson said the company was delighted with the results of the multi-well evaluation programme so far, which have confirmed the scale and potential of the asset.
“Operations in Senegal have been safely conducted and are ahead of schedule and substantially under budget. We have gathered a very large volume of data from operations to date and we look forward to progressing our long-term, multi-field, multi-phase exploitation plan to maximise value in Senegal. We see clear potential to access additional cost savings from the current lower operating environment in respect of planned future activity," Thomson said.
Shares were down 2.3% in late morning trading.