Oil & Gas Corporate News
Gulf Keystone (BUY, £2.40) (GKP, 174.5p, ? 7.88%) announced the results of the previously reported well test at the Shaikan-2 Appraisal Well drilled approximately nine km to the south-east of the Shaikan-1 discovery well. Shaikan-2 has achieved short term, indicated rates of 10,144 barrels of oil per day (bopd) and a stabilised flow rate of 8,064 bopd of 26 degrees API oil and 2.44 MMscfd of gas (Gas Oil Ratio of 302 scf/bbl) on a 2" choke at a 250 psi flowing wellhead pressure. Given the Shaikan-2 well test conditions, as well as the successful well stimulations at Shaikan-1 & 3, the Company anticipates that sustained rates in excess of 10,000bopd could also potentially be achievable at Shaikan-2. The Shaikan-2 flow rates are consistent with the Shaikan-1 & 3 rates but with higher quality oil and more associated gas, both of which can lead to an enhanced recovery rate. The oil gravity of 26 degrees API is significantly better (lighter) than Shaikan-1 & 3, both of which are currently producing 18 degrees API oil from the upper sections of the Jurassic at the Company's Extended Well Test facility. The Shaikan-2 well test was conducted in a 44m interval (1792-1836m) in the upper section of the Jurassic age formation. Following this test, normal drilling operations will recommence and the Company anticipates that further Shaikan-2 drilling will follow the Shaikan-1 geological sequence, i.e. through multiple, potential Jurassic and Triassic reservoirs before reaching TD at the bottom of the Triassic or into the top of the Permian, depending on well results.
Comment: Excellent test results with good quality oil and good reservoir drive. There are plenty more objectives to tests on the way to TD and we remain Buyers with unchanged 240p price target.
San Leon Energy (LON:SLE) (BUY, £0.65) (SLE, 34.5p, ? 0.75%) and its Joint Venture Partner in Iraq Al Meinaa Oil Services Company, as per our announcement in January 2010, have signed a Joint Participation Agreement with the Governorate Council of Karbala in Central Iraq. Under this Agreement the consortium (San Leon, Al-Meinaa and the Governorate Council of Karbala) will submit a joint proposal to the Ministry of Oil in Iraq for the development of the fields of Kifil, West Kifil and Merjan under a production sharing contract. These Fields are located in the Karbala province (Kifil…
