Leni Gas & Oil (LON:LGO) was on the move in this morning’s trading, with the stock spiking to an intraday high just below 6p, being the second most traded stock on the London Stock Exchange.
Around 6% of the company’s issued shares have changed hands on the AIM market today, with 43.3 million shares traded by lunchtime.
After hitting 5.9p in early trading the share price has eased somewhat and at midday it was at 5.125p, up 10%.
Investor interest has been picking up substantially in recent months, which can be seen in terms of both the number of deals and value traded on the AIM market.
According to stock exchange data the number of LGO trades nearly trebled from the average in the preceding 10 months, and the stock has almost reached September’s marker in this month already.
The company’s recent news-flow has centred around its Spanish assets.
Last Friday, LGO said it believes that artificial stimulation will maximise total recoverable reserves on its Spanish acreage.
Consequently it is planning to pilot nitrogen enhanced oil recovery (EOR) on the Ayoluengo reservoirs. The company has agreed a deal with US engineering specialist Praxair (NYSE:PX) for the project.
The pilot project will focus on Ayoluengo’s west flank reservoirs which contain an estimated 27 million barrels of oil (mmbo) - oil initially in place (OIIP).
The engineering design and permitting has already started and the construction work is scheduled to start at end 2010, with nitrogen injection starting by Q1 2011.
At Ayoluengo the company is producing oil from upper Jurassic reservoirs on the east flank, which have an estimated 79 million barrels of oil (OIIP).
The east flank has a 21% historical recovery rate, while just 1.4 million barrels were produced from the 27mmbo west flank reservoirs.
Earlier last week, on the 27th September LGO told investors that oil flowed to the surface during drilling of the nearby Hontomin-2 well. The well encountered oil at a depth of 1,350m.
"This is an extremely important development for the company ... oil flowing to surface is an encouraging sign forthis well," chairman David Lenigas commented.
The company has now drilled the top reservoir formation, which will be fully monitored over the next few days, before drilling resumes to open the bottom reservoir formation.
The Hontomin structure has an estimated 2.40mmbo (million barrels of oil) in mean probable OIIP (Oil Initially In Place) resources. The Hontonmin-2 well, and the associated testing program, are designed to appraise long-term production potential.