Cabot Energy Plc (LON:CAB) has told investors that the side-track of the 16-05 well at the Rainbow project in Canada has seen significantly better-than-expected flow rates during well testing.
The side-track well is now in production, connected to the existing pipeline.
WATCH: 'Latest side track well highlights potential of Canadian assets'
It was tested for a 24-hour period during which it yielded some 573 barrels of oil. The exit rate of the test was around 680 bopd.
"The 16-05 side track result exceeded our expectations and strongly supports our technical view on the potential of the Canadian assets,” said Keith Bush, Cabot chief executive.
Cabot said the well is now producing under natural flow, though it is planned that the well will be restricted to a rate between 200 and 225 bopd in order to ‘best manage’ the reservoir’s long-term production potential.
The company added that the drill team and rig will now move on to the next planned side-track where drilling is anticipated to start in December and production could start before the end of the calendar year.
Planning is also at an advanced stage for a planned 2018 campaign, comprising four side-track wells and as many as ten well work-overs.
Cabot said it remains on-track to achieve an exit rate of 800 to 1,000 bopd for the year.
READ: Cabot Energy set for production growth as it kicks off Canada work programme
Bush added: “The company's existing Rainbow and Virgo acreage has many future side track candidates and high grading this inventory to provide low risk production growth at competitive investment metrics is the current priority.
“The subsurface and operational work undertaken during 2017 has greatly advanced our understanding of the Canadian assets and the true potential of the position, and we look forward to creating further low cost production growth via our 2018 winter work programme."
Shares were up 3.1% to 4.12p on Monday afternoon.
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