US Oil & Gas Plc (USOP) told investors it has decided to focus on plans for new wells rather than frack the previously drilled Eblana-3 well.
The decision comes after a technical review of the project.
“Recommendations to the board are that it should not proceed with fracking Eblana-3, as it may not offer a sufficiently high chance of producing a well capable of flowing hydrocarbons for an extended period at acceptable rates,” the company said in a statement.
“The decision of the board is therefore not to proceed with the frack but instead to allocate the funds to drilling a further well or wells.”
USOP added: “The latest geological studies carried out by the company indicate that oil in the valley centre is mostly migrating through the lease area of Eblana-1 and Eblana-3 rather than being trapped in large quantities.
“Significantly more prospective locations with possibly superior traps are believed to exist within the company’s lease area to the west and to the east.”
“Subject to funding and regulatory permissions, the company is considering drilling a further well or wells to the west, where the current basin model indicates a structural analogue of Railroad Valley’s Grant Canyon field may be present.
“Grant Canyon historically included the most productive onshore well in the USA, flowing at over 4,000 bopd.”
USOP noted that more funds will be required for drilling, although cash previously earmarked for Eblana-3 fracking eases the burden.