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US Oil & Gas “enormously encouraged” by early results from Nevada well

Last updated: 06:20 01 Mar 2013 GMT, First published: 07:20 01 Mar 2013 GMT

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US Oil & Gas (GXG:USOP) said it is “enormously encouraged” by the early results from its Eblana 1 well in Nevada’s Hot Creek Valley.

While testing is still ongoing, the company is producing two grades of oil from two separate zones: a 28.5 degree API (American Petroleum Institute) and a 33 degree API crude.

US Oil said testing will be paused for further data analysis.

This, it says, will “guide future perforation within the flowing zones” in order to confirm stabilised production rates and maximise production.

The current testing programme has also confirmed an additional eight to 10 potential drilling locations for several prospective pools.

These are to the south and south west of Eblana 1.

Chief executive Brian McDonnell said: "Although the testing of Eblana 1 is ongoing, we are enormously encouraged by the results so far.

“We have a producing well which, subject to further testing, we believe may prove commercial.

“For a first exploration well in an unproven location this is a remarkable result, and we are delighted by the achievement.”

Separately, the group said preliminaries require for the issue of American Depositary Receipt shares have been completed.


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