Valiant shares rise on Don Southwest discovery
By BFN News | 12:06 PM | Friday 21 January, 2011
Shares in North Sea oil and gas explorer Valiant Petroleum plc were up by more than 9% after the company announced a discovery from the first exploration well in its 2011 drilling campaign.
The Don Southwest 'E' Panel exploration well reached total depth of 3,517m and encountered a hydrocarbon bearing Brent sand formation indicating a gross recoverable accumulation of 5-7m barrels of oil (2-3m barrels of oil net to Valiant).
The company said the well would now be suspended as a future production well, expected to be brought on-stream in the second half of 2011, representing incremental volumes on current 2011 production guidance.
CEO Peter Buchanan said, 'This result confirms our long-held belief that the Don Area contains upside potential which can be rapidly commercialised through the existing infrastructure.
'We look forward to working together with our partners in the Don Area to prove-up further volumes in 2011 and beyond.'
The field partners will now drill a low cost pilot-hole into Area 26 to appraise commerciality of the discovery.
Following completion of the Area 26 well, drilling will start on the Don Southwest Area 6 development, expected to come on-stream during the summer.
Valiant said its average production rates net to the company for 2010 were more than 7,400 barrels of oil per day, representing the upper end of production guidance.
Current production rates, oil prices and operating cash flow were running ahead of internal forecasts.
Shares rose 55.5p to 655p at noon.
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