Analysts at broker WH Ireland think the successful completion by Highlands Natural Resources PLC (LON:HNR) of two long-lateral wells using state of the art US monobore drilling technology “is a tremendous achievement for a junior oil company.”
Yesterday, the company said it had successfully finished drilling on the Wildhorse 5-64 15-16-1BHZ well, the second on the East Denver Niobrara Project in Colorado ahead of schedule, and has seen the positive "shows" of oil and gas.
READ: Highlands Natural Resources says second well drilled on the East Denver Project has seen positive "shows" of oil and gas
Highlands noted that, similar to its first East Denver well, Powell 5-64 15-16-1CHZ - where drilling and casing operations completed on 29 August - Wildhorse showed oil and gas is present in the well's drill bit cuttings and drilling mud from the Niobrara formation.
In a note to clients, the WH Ireland analysts commented: “These were the first two wells drilled by the company and the support of the industry for Highlands (funding partners: Raisa + a large undisclosed US service company, licence holders: ConocoPhillips + Renegade, service companies: Halliburton, Baker Hughes, True…) has been based on the people within Highlands.”
The analysts added: “With proven operational delivery Highlands would pull itself onto a higher level. There are very few juniors operating in the basin to our knowledge and many of the larger companies need wells to be drilled.”
They concluded: “We see big implications from continued success throughout the fracking operations. We also note that frack crews today are in demand and the company is clearly being prioritised by service companies not known for providing favours to junior oil companies.”