Shares in Aminex plc (LON:AEX) and Solo Oil PLC (LON:SOLO) shares advanced thanks to better than expected initial results from the Ntorya-2 appraisal well in Tanzania.
Ntorya-2 was successfully drilled to a depth of 2,750 metres and encountered 51 metres of gross gas bearing reservoir, with net pay interpreted to be between 25 and 30 metres.
For context, the prior Ntorya discovery well - located some 12 kilometres away – encountered a 25 metre gross interval, of which a 3.5 metre section was perforated and tested.
Aminex said drilling in the reservoir section was associated with associated with significant gas influxes and higher than expected pressures.
Aminex and Solo Oil shares climbed 11.9% and 10.8% respectively to 3.12p and 0.493p each.
Craig Howie, analyst at stockbroker Shore Capital, in a note, said the well result is an excellent outcome that de-risks the project considerably.
“With a thick, high quality reservoir indicated, we anticipate a material upgrade to our 3.9p/share risked net-asset value (NAV) estimate and look forward to incorporating the final results from Ntorya-2 into our valuation following the completion of evaluation work including well testing in the short term,” Howie said in a note.
Elsewhere, SP Angel described it as a “solid step forwards” and said the result should provide greater confidence in the size and scale of the Ntorya field.
Operations are now underway to deepen the well slightly, to 2,780 metres, prior to wireline logging and that will be followed by detailed petrophysical analysis. Preparations are also underway for a programme of flow testing.
The results of both petrophysical analysis and flow testing are expected by late February.
It is intended that Aminex will apply for a 25-year development license for the Ntorya field, subject to the results of flow testing.
"We are delighted with the progress of the Ntorya-2 appraisal well, which is ahead of our expectations. The reservoir is both thick and high quality,” said Jay Bhattacherjee, Aminex chief executive.
“Aminex looks forward to providing the results of the flow-testing which will enable the joint venture to consider its options for development of the Ntorya field."
Aminex added that the well also encountered traces of oil in the gross reservoir interval, and the company said it would evaluate the implications of the positive development with an update to the basin model.
Aminex has a 75% stake in Ntorya, while Solo Oil PLC (LON:SOLO) owns a 25% interest.