Shares in Rockhopper Exploration (LON:RKH) soared by 32% on Monday morning, after the latest results of its Sea Lion oil discovery in the Falkland Islands suggested a good quality reservoir.
The AIM-listed group said that after completing wire-line fluid and pressure testing at exploration well 14/10-2 located on the North Falkland Basin, all samples pointed towards moveable oil.
“All current indications are that the oil recovered is moveable which, if confirmed, would be further positive news. We will now wait for confirmation of the quality of the fluid as a result of the laboratory analysis,” according to Rockhopper Exploration (LON:RKH) Managing Director Samuel Moody.
The group said that the ability of the sample chambers to fill rapidly was suggestive of a good quality reservoir with no evidence of any free water. Furthermore, pressure data came up “good” with pressure readings indicating two separate oil columns and no water sands.
However, the Ocean Guardian rig is not equipped to analyze the fluid samples, the group said in a statement, so further testing in a laboratory will take place.
The news comes just five days after the group watched its shares more than double in value as it announced news of the first oil discovery in the North Falkland Basin. Rockhopper attracted investors with news that is had discovered 53 meters of net pay in the well, after drilling to a depth of 2,744 meters.
The company now intends to run a liner and suspend the well for further testing and told investors that operations are expected to take a further week to ten days to complete. Fellow companies operating in the region were also enjoying the fruits of Rockhopper's discovery, with the likes of Desire Petroleum (LON:DES) shooting up 40%, while Borders & Southern Petroleum (LON:BOR) shares climbed by 17%.
News of last week's discovery came as a relief to investors who were left reeling after Desire Petroleum drew a blank at its Liz well at the start of April, in which Rockhopper owns a 7.5% working interest.
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From the Bloomberg App on my iphone the price at close on AIM:RKH was +51.03%. This is a 51% increase on the price on Friday which was a 48% increase on the price on Thursday which closed up 150%. All we need now apart from the lab tests is the data on total recoverable oil which could be between 150-450 million barrels.May 10th, 2010 - 08:09 pm 0
The OG crew have certianly done the Islands and RKH proud. All of the PIs who put our hard earned money in such a risky venture are rewarded for their conviction and belief in the Falkland Islands.
Now the NFB has been proved then it looks like the Islanders are going to be the richest people in the world in terms of GDP. If any community deserves this reward then it is certainly the Islanders who have in the past faced a great deal of disproportinate bullying from their nearest regional neighbour.
The rig will now move to test the Toroa prospect for AIM:FOGL in an undrilled basin to the east of the Islands. Exciting times ahead for all those invovled.
Keep up the good work and Best of British.