Leyshon Resources confirms fracking needed at ZJS5 well; shares plunge

The share price of Leyshon Resources plummeted 22.73 per cent to 14.88p at 08:44 on Tuesday morning following an update from the AIM-listed mining company.

The share price of Leyshon Resources plummeted 22.73 per cent to 14.88p at 08:44 on Tuesday morning following an update from the AIM-listed mining company.

The company announced that its wholly-owned subsidiary Pacific Asia Petroleum Limited had completed flow tests on two of the previously identified potential pay zones in well ZJS5 in China.

The company confirmed that tests had shown that: "stimulation will be required to produce commercial flows."

Previously, the two zones had been identified as having the potential to flow without stimulation and the opportunity was taken to flow test them ahead of the planned frack testing in the spring.

Leyshon Resources stated that the local practice was not to conduct frack testing during the coldest of the winter months. As neither of the zones recorded sufficient gas flows, accordingly frack testing will proceed as originally planned.

Well ZJS6 is currently at approximately 800 metres depth with a target depth of 2,320 metres and wireline logging scheduled for mid-to-late January.

The plan is to test any zones that have the potential to flow without stimulation in ZJS6 and then conduct frack tests on both wells following Chinese New Year.

Well ZJS6 is located seven kilometres from ZJS5, close to southern the boundary of the 708 km2 Zijinshan Production Sharing Contract.

Wells ZJS5 and ZJS6 are part of a three well program designed to test for gas in formations in an unexplored 380 km2 central depression area that appear to show good continuity with the neighbouring Sanjiaobei discovery.

MF

Recommended

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020

Most Popular

Why we won’t see a house-price crash in 2021
House prices

Why we won’t see a house-price crash in 2021

Lockdown sent house prices berserk as cooped up home-workers fled for bigger properties in the country. And while they won’t rise quite as much this y…
18 Jan 2021
Inflation is the easiest way out of this – just don’t expect politicians to admit it
Inflation

Inflation is the easiest way out of this – just don’t expect politicians to admit it

The UK government borrowed £34.1bn in December, a record amount for that month. Britain's debt pile now amounts to 100% of GDP. How are we going to pa…
22 Jan 2021
When will the US stockmarket bubble burst?
US stockmarkets

When will the US stockmarket bubble burst?

With US stocks more expensive than before the Wall Street crash of 1929, there are growing signs of “mania”. But what will push markets over the edge?
22 Jan 2021