Shares in Borders and Southern soared almost 20% on Thursday as the company revealed positive findings from the analysis of condensate fluids from its Darwin discovery well in the south of the Falkland Islands where it plans to continue appraisal drilling in 2014.
The well 61/17-1 initially disappointed as it discovered gas and gas condensates rather than oil. However, the discovery’s potential commerciality was boosted by the news released on Thursday that the company is estimating Darwin could have between 130 and 250 million barrels of recoverable gas condensate.
“The initial condensate yield from the Darwin gas samples, as measured in a laboratory separator test, varies from 123 to 140 stb/MMscf. The API gravity of the condensate is 46 to 49 degrees. Based on the condensate yield and ongoing reservoir modelling, the Company estimates the recoverable volume of condensate to be 130 to 250 million barrels with a mid case of 190 million barrels” said the release.
Borders and Southern believe the findings have ‘exciting implications’ for its prospect and lead inventory, and it is now planning its next drilling program to further appraisal the discovery.
Discussions with a seismic contractor regarding the acquisition of additional 3D seismic are said to be in progress and the company plan to have a vessel in the Falklands at the start of 2013 to commence the survey.
“This survey will focus on similar prospects to Darwin currently outside our existing 3D area. Whilst the final costs of the 2012 drilling program will not be fully known until after the demobilisation of the rig later in the year, the Company can state that it is fully funded for the 3D seismic acquisition and processing, the reprocessing of the Company's 2007 3D seismic data and all the technical studies that need to be undertaken on the samples collected from the two wells”.
The company says that given the encouraging results from the Darwin well, they will start planning the next drilling program, which is likely to include both exploration and appraisal wells. Borders and Southern said that the timing of drilling will be dependent on rig availability but realistically this will not occur before 2014.
According to Borders and Southern they are currently exploring the best way to fund the next phase of the programme, including the possibility of now bringing in partners.
Borders & Southern Petroleum plc is an oil & gas exploration company listed on the London Stock Exchange AIM (BOR). The Company operates and has a 100% interest in five Production Licences in the South Falkland Basin covering an area of nearly 20.000 square kilometres. The Company has acquired 2.862 km of 2D seismic, 1.492 square kilometres of 3D seismic and drilled two exploration wells with the Leif Eiriksson rig.
The rig is currently drilling for Falkland Oil and Gas Ltd. at the Loligo exploration well 42/07-01, Friday 3 August 2012. The well is located approximately 200 km east of the Falkland Islands. FOGL is the operator of the well, holding a 75% interest, together with its joint venture partner Edison International Spa who hold the remaining 25% interest in licence PL028. It is the first of a two well exploration program using the semi submersible drilling rig.