LONDON (Alliance News) - Leni Gas & Oil PLC Monday said its GY-665 well at the Goudron Field in Trinidad has now intersected 687 feet of gross oil bearing sands in its primary target, the Gros Morne formation, and the company has decided to shorten the planned total depth of the well.
The oil and gas exploration and development company said the well, which is the second of 30 new development wells on the site, found the large region of oil sands between 2,006 feet and 2,693 feet in depth.
However, the company said that when the well reached 2,750 feet in depth, at the base of the Gros Morne formation, it decided to shorten the planned total depth of the well and to not drill into its secondary targets due to the high quality of the Gros Morne hydrocarbon indications it has already found.
The company said it now hopes to reduce any risks linked with deepening the well and to accelerate the time frame for bringing the site into production by stopping now.
LGO said the well will now be logged and cased, before being completed as a Gros Morne producer, while its previously planned secondary targets will be drilled by one of the other wells drilling the site.
The company said it now expects net pay at the GY-665 well to be comparable to its nearby GY-664 well, which was completed last month and stabilised production at a strong rate of 240 barrels of oil per day in early June, after an initial flow rate of 326 barrels of oil per day.
Last Monday, LGO said it had already intersected a 310 feet region of gross oil sand in the separate Goudron sandstones formation of the GY-665 site, on its way to the primary formation, after drilling 1,606 feet in depth.
Due to the positive results from both wells, LGO has now initiated arrangements to mobilise a second drilling rig to the Goudron Field in order to speed up the drilling of additional wells.
"The results of these first two wells begin to validate our geological models and give the company greatly increased confidence in accelerating the redevelopment program," Chief Executive Neil Ritson said in a statement Monday.
The news comes after the company announced on Wednesday last week that it has terminated negotiations with Pansoinco srl over a possible partnership on LGO's oil and gas assets located in Northern Spain.
LGO said at the time that it is no longer actively seeking further expressions of interest in the partnership though did not rule out strategic alliances in the Spanish market in the future.
Under the terms of the potential deal, the partnership would have covered LGO's oil and gas assets located in Northern Spain, including the producing Ayoluengo Field and the prospective Hontomin Field development.
"In the light of the recently announced successful drilling and production results in Trinidad, the company has reassessed the benefits of the proposed partnership and is now firmly of the opinion that greater value can be obtained from the Spanish assets through LGO investing in additional well capacity in the period of 2016 to 2020, at a time when there is expected to be free cash flow available from the company's operations in Trinidad," Ritson said at the time.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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