Shares in AIM listed oil groups Northern Petroleum (LON:NOP) and Egdon Resources (LON:EDR) both made gains this morning on news that a well close to the Hornsdean oil field near Chichester in the UK had encountered oil. Northern, the 50% owner and operator of the Markwells Wood-1 well, said assessments of drilling logs had confirmed that the entire Great Oolite drilled reservoir sequence in the well was oil bearing. It said the success of the well, helped by current oil prices, should enhance the value of its other undeveloped discoveries and exploration prospects in the UK

The presence of live oil was observed when the 30 feet of core was extracted from the well. Initial analysis of the logs indicates the well, which was deviated at an inclination of approximately 56 degrees through the Great Oolite, penetrated a gross hydrocarbon bearing interval of 275 feet with a calculated net reservoir of 192 feet with an average porosity of 13-14%, a typical porosity value for this reservoir in the nearby fields in the same formation. The top of the Great Oolite was encountered 51 feet low to prognosis and the Great Oolite vertical thickness was 146 feet compared to a prognosis of 240 feet.

Northern said that analysis of the core was currently underway and that data would be integrated with the petrophysical evaluation and image logs to design the testing programmes. Testing to establish pressures and flow rates in the existing wellbore will take place when the required services and equipment have been contracted.

Derek Musgrove, the managing director of Northern, said: “The Markwells Wood-1 well has to date presented us with encouraging results. An oil bearing sequence has been encountered in the target reservoir adjacent to the producing Horndean oil field within its mapped structural closure. Detailed analysis of the core and logs will provide information on reservoir quality. Expected production rates will be derived from the future test programme. Success at Markwells Wood, helped by current oil prices, should enhance the value of the other undeveloped discoveries and exploration prospects held under licence by Northern in the UK.”

Shares in Northern responded with a 1.4% rise to 138p while shares in Egdon, which has a 10% stake in the licence,…

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