British oil and gas explorer Encore Oil Plc said it and its partners had discovered a large natural gas find in the East Breagh well in the UK’s North Sea, sending its shares higher on Friday.
The AIM-listed Encore, which has a 15% interest in the project, said the well encountered “significant gas shows” and that initial analysis indicated the presence of a 72 foot net gas bearing interval. “Subject to successful testing, we believe that this well has established a very significant gas accumulation at Breagh”, Encore CEO Alan Booth said in a statement. Encore’s shares rose 6.3% to 38 pence by 0815 GMT.
Partner Faroe Petroleum Plc, the Aberdeen-based independent which has a 10% stake, said its preliminary analyses of both the core and the well logs indicated two gas bearing intervals. It said the results correlated with the sands encountered in the successful West Breagh well, drilled by its joint venture partners in 2007. “These wells will provide key data for assessing the economic viability of developing the Breagh gas field and creating potential for considerable value creation for our shareholders,” Faroe’s CEO Graham Stewart said. Stockbrokers Daniel Stewart, who have ‘buy’ recommendation on Faroe’s shares and a 300p price target, said a successful appraisal could see Breagh become a viable standalone project. Faroe’s shares were down 0.2% at 118p.
Canadian-based operator Stratic Energy Corp Plc also confirmed the gas find at East Breagh and said further evaluation work on the well would be carried out. “The results from this important well are very encouraging and go a long way towards proving that the east and west areas of the structure are part of a single larger gas accumulation,” President and CEO Kevin Watts said. Shares in Stratic Energy, which has a 10% stake in the project, slipped 3.9% to 24.5p.
The other partners in Breagh include Canadian-based Sterling Resources Ltd, which is the operator with a 45% stake, and Regernesys and Petroventures International, who hold 15% and 5% respectively. (Reuters)