LGO Energy PLC (LON:LGO) this morning issued an update of mixed news regarding group production and its Goudron Field operations. The company’s share price is currently down nearly 17%
LGO says that its 10-day average group production rate has exceeded 2,000 barrels oil per day (bopd) since 23 December 2014, with average group production for December reaching 1,685 bopd.
In the Goudron Field, the production rate at GY-670 has remained “consistently high”, averaging 1,045 bopd of 37 degree API (light crude) oil. LGO reports that the well has a calculated open-hole flow rate in excess of 6,000 bopd.
However, at GY-671 there has been a restricted flow rate of 216 bopd, and whilst it has intermittently produced quantities of gas, it has also produced up to 0.3% of sand.
LGO says that because of the short length of the sump between the lowest perforations and the current total depth of the well, together with the risk of the well sanding up, it will be replacing the tubing-conveyed guns used to complete the well with a conventional production string and that the well will be recompleted. The work is expected to be finished “in the next few days”.
GY-669 — the eighth and last Goudron well to be drilled in 2014 — is being prepared for completion, LGO says, and production is anticipated to be begin over the next week.
LGO also reports that the rate of oil sales has “substantially increased”, thanks to cooperation from the Petroleum Company of Trinidad and Tobago, and that it doesn’t expect any sales bottlenecks in 2015.
Commenting on the update, CEO Neil Ritson said:
“The 2014 work programme, and especially the GY-670 well, has been truly transformational for LGO with a 5-fold increase in sustainable daily Group production. As we move into the 2015 drilling program we have high hopes of continuing the success we have seen in the past year. The low cost of our operations ensures they are sustainable at low oil prices and we have no plans to decrease the extent of our work program at Goudron.“
Despite this morning’s slide, LGO’s share price is up 311% on this time last year, during which time the AIM All-Share has fallen almost 20%. But over five years the index is winning, with a rise of 9.4% compared with just 2.5% by LGO.
