Hawkley Oil & Gas (ASX: HOG) has clearly won some supporters on the ASX with the company’s shares last trading at A$0.225, or 21.62% higher on volume of about 1.45 million shares.
This is likely due to removal of constraints on its Ukrainian production owing to maintenance work on a third party gas plant and the prospect that a second production well will start flowing in the near term.
Indeed, the Sorochynska-202 development well could double the company’s production, which averaged about 6.1 million cubic feet of gas and 196 barrels of condensate per day during March before the start of works at the plant in April.
This could in turn result in monthly revenue of more than A$5.5 million, far above the A$2.13 million Hawkley recorded in July.
Sorochynska-202 is being drilled to provide an additional drainage point for the main B18 reservoir in the Sorochynska field as well as appraise the deeper B19 reservoir which flowed gas on test in Sorochynska-469.
The well is currently at a depth of 4060 metres having intersected the top of the B18 reservoir at 4039 metres as prognosed.
Wireline logs have indicated the B19 should be intersected a depth of about 4190 metres.
While drilling of Sorochynska-202 towards its total depth of 4250 metres has taken a little longer than expected, the turn key nature of the drilling contract has limited Hawkley’s downside exposure.
Proactive Investors is a market leader in the investment news space, providing ASX “Small and Mid-cap” company news, research reports, StockTube videos and One2One Investor Forums.