(Adds details, broker comment)
LONDON (Thomson Financial) - Venture Production Plc and Encore Oil Plc said
they have found gas in the Barbarossa appraisal well in the southern North Sea.
The hole, known as 47/9c-11x, produced gas at a rate of up to 40 million
standard cubic feet a day, exceeding their pre-drill expectations.
Barbarossa will be developed jointly with the nearby Channon field, with
first gas expected in 2009. Channon produced up to 55 million standard cubic
feet a day during testing work last year.
Venture is the operator of the project with a 90 percent stake, while Encore
owns the remaining 10 percent.
Combined recoverable reserves from Channon and Barbarossa are 70 billion to
80 billion cubic feet, with a combined well potential from both fields of around
80 million standard cubic feet per day, both net to Venture.
"With the outlook for gas prices having improved considerably since we
drilled the Channon discovery well last year we now have a very attractive joint
development lined up for delivery next year," said Mike Wagstaff, Venture chief
executive.
McCall Aitken McKenzie & Co, in a note, reiterated its 'accumulate' stance
on Venture shares with a price target of 855 pence following the update on
Barbarossa.
"The stock has come in from the cold and given the forward UK Natural Gas
curve, realising near-term production is a significant boost," it said.
At 11:38 am, Venture shares were up 2.3 percent at 800-1/2 pence.
monicca.egoy@thomsonreuters.com
mbe/mbe/ajb
COPYRIGHT
Copyright Thomson Financial News Limited 2008. All rights reserved.
The copying, republication or redistribution of Thomson Financial News Content,
including by framing or similar means, is expressly prohibited without the prior
written consent of Thomson Financial News.
|