Shares in Rockhopper Exploration (LON:RKH) marched on another 2.5% to 513.5p this morning on news that its Sea Lion 1 discovery well in the North Falkland basin has the potential to flow at even higher rates than recent tests suggested.

Earlier this month, Rockhopper said the well had flowed at in excess of 2,000 barrels per day whilst being tested and that this was in line with expectations. However, in today’s update, the company said that it had since emerged that one of the perforating guns had misfired on the test, meaning that only two out of four intervals in the well had been perforated and contributed to the flow. Rockhopper said that without these constraints the well could have flowed at 4,000 bopd.

The Sea Lion test was carried out over four perforated intervals totalling 77m between 2,403m and 2,566m (below drill-floor). After perforation, a small amount of oil was produced into the tubing to clean the perforations and enable downhole oil sampling. The well was then shut in for approximately two hours to determine the initial reservoir pressure. The final recorded pressure was 3,385 psia at gauge depth (2,344.6m below drill-floor) and was still building. The well was then opened to flow through the three and a half inch test string, initially on a 24/64th choke, opened to a 64/64th choke during the flow period and reduced to 44/64th towards the end of the flow period to allow samples to be taken. The final flowing wellhead pressure was approximately 120 psia. A wax dissolver chemical was injected at the subsea test valve to mitigate the appearance of wax.

Rockhopper said it believed that the flow rate on the test was inhibited by incomplete perforation, waxing of the tubing string above 800 metres, increased viscosity of the oil as it cooled in the upper part of the test string and a lack of specialist equipment. The company said it also believed that, with a more optimal well location and horizontal well completions, significantly higher flow rates could be achieved from future production wells.

The value of shares in Rockhopper has soared since the end of May when it became the first of a group of companies operating in the Falklands to strike oil. Analysis of the company’s Sea Lion discovery so far appears to show…

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