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AIM-quoted Jubilant Energy N.V. (LSE:JUB) has concluded its’ Phase III drilling programme in India, after successfully testing the last of the seven wells at its only producing Kharsang field, the company said today.
KHG-64, the seventh well, is now flowing at a rate of 226 barrels of oil per day (bopd) after reaching a depth of 1,557 metres, which took about two and half months.
The well encountered three metres of oil between 1,483 metres and 11486 metres, where testing was carried out, and four metres of gas in the interval of 1,529 metres and 1,532 metres.
An up hole hydrocarbon potential of around 60 metres net thickness, out of which, 19 metres is of net oil bearing sands have been identified in the said well, according to the company.
Jubilant said six of the seven wells are producing approximately 550 bopd, while the sixth well showed gas and was shut in for future utilisation.
Depleting Wells
The Phase III drilling campaign was started in July 2011 to augment production as the existing wells are depleting faster than anticipated. Last year, the group saw a decline from 1,809 bopd to 1,771 bopd, 443 bopd of which is attributable to the company in respect of its’ 25% working interest.
GeoEnpro Petroleum Ltd., 50% owned by the wider Jubilant group, holds 10% interest in the 10-square kilometre Kharsang field, with GeoPetrol holding the other 25% and the remaining 40% controlled by Oil India Ltd.
As at March 2012, the oil field has 35 producing wells out of a total of 62 wells. Explorations are also ongoing at Jubilant’s other acreage, including Tripura and Krishna Godavari, where gas production is set to commence next year.
Betting on the successful results of the seven wells, the consortium plans to drill six more development wells under the Phase III Extension programme after receiving necessary approval, the company said in a statement.
Jubilant has to be aggressive in increasing production as last year’s full year resulted in a loss. The group’s US$19 million revenue in 2011 of its oil was not able to compensate the cost of the business, 40% of which went to personnel.
That is probably the reason why the market wasn’t really that upbeat in receiving the news. With only about 16% of the more than 416 million shares in issue in public hands, only 65,000 shares were traded for a 13.5% rise to 21 pence by 1:00 PM GMT, following the news.
Company Spotlight
Jubilant Energy B.V. is an oil and gas exploration and production company incorporated in The Netherlands and listed on the Alternative Investment Market. The company holds assets in India, Australia, and more recently in Myanmar.
The company is effectively controlled by Jubilant Energy Holding B.V., which holds 84.02% of the total issued capital. It joined trading on AIM in 2010.
