LONDON--Falkland Oil and Gas Ltd. (FOGL.LN), an oil and gas
exploration company focused on its license areas to the South and
East of the Falkland Islands, Tuesday reports poor quality
hydrocarbons at Scotia exploration well 31/12-01 which it now plans
plug and abandon.
MAIN FACTS:
-Well was drilled to a depth of 5,555 meters and penetrated the
mid Cretaceous aged reservoir objective on prognosis, encountering
strong gas shows.
-Interpretation of wireline log data indicates that the target
interval 4719 meters to 4769 meters comprises 50 meters of
hydrocarbon bearing fine grained sandstones and claystones.
-Wireline logs indicate that, at this location within Scotia,
the sandstones form fairly poor quality reservoir, although some
zones have up to 20% porosity.
-Other thin hydrocarbon bearing sandstones were encountered
beneath the main target in the interval 4900 meters to 5164 meters;
subsequent evaluation of the main interval using a wireline
formation testing tool didn't flow hydrocarbons, indicating that
the reservoir has low permeability.
-Well was deepened below the main target in order to penetrate
and sample Cretaceous aged source rocks.
-Scotia well has proven a working hydrocarbon system in the mid
Cretaceous Fan play and has also demonstrated that Scotia is a
viable stratigraphic trap.
-It is expected to take 10 days to plug and abandon the well; it
is estimated that Company's cash balance post the 2012 drilling
campaign will be 220 million dollars.
-PGS M/V Ramform Sterling is expected to arrive in the Falklands
and start 3D seismic acquisition imminently.
-Falkland Oil & Gas is the operator of the well, holding a
40% interest; Noble Energy Inc. (NBL) holds a 35% interest and
Edison International Spa, holds the remaining 25% interest.
-Under the terms of the farm-out agreements, Falkland Oil &
Gas is paying 15% of the costs of this well.
-Shares at 0915 GMT down 29 pence, or 46%, at 34 pence valuing
the company at 204.6 million pounds.
-Write to Ian Walker at ian.walker@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires