Small-cap investor favourite Leni Gas & Oil (LSE: LGO) has been rising in recent days in anticipation of this morning’s drilling update, with the results enough to keep the positivity locked in to the price and keeping it roughly level with yesterday’s close — which shareholders ought to be pleased with, as any negativity could easily have sent it plummeting.
GY-670, the seventh of Leni’s planned 30 new development wells at the Goudron Field in Trinidad, and the second well from the third drill pad, was spudded yesterday and is drilling ahead in the Goudron Sandstones at a depth of approximately 220ft.
Leni plans to test the Goudron and Gros Morne Sandstone reservoirs to a total depth of at least 3,100 feet (equivalent to 3,305 feet measured depth) and will be deviated approximately 600 feet northwest from the surface location.
Furthermore, today’s update also released additional information on the previous well to be spudded, GY-669, which is now ready for completion as a production well, with chief executive Neil Ritson describing it as “another successful well with considerable net pay.”
GY-669 reached a total depth of 3,505 feet at measured depth, slightly less than expected since it was considered that all sand-prone intervals had been penetrated at that location. The final section of the well, which was drilled in 8 ½-inch hole, has now been successfully cased to its total depth.
Analysis of the electric logs is not yet complete, though, as the presence of higher than previously identified reservoir pressure near the base of the well suggests a different fault block has been penetrated than in earlier wells. However, Ritson did point out that GY-669 saw the highest reservoir pressures yet, which “may have major benefits for future production from this part of the field”.
Positive signs, then, but it needs to be pointed out that this is a volatile stock prone to 10%+ swings in both directions. If, like me, you are seeking investments that could really hit the big time, then I would advise that you take a close look at "How You Could Retire Seriously Rich".
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Sam Robson owns shares in Leni Gas & Oil. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.