Shares in Aurelian Oil and Gas were down on Thursday after it reported problems with its first wildcat exploration well on the Sosna-1 block in Poland.
Oil did not flow when the well was perforated because there was brine in the well-bore, prompting Aurelian to have a rethink on how best to access the hydrocarbon reserves. Despite this, the firm insisted it was 'encouraged' by recent developments on the Sosna-1 block on the Zechstein 'reef' oil play in the Torzym concession, in the Central Lowlands of Poland.
"While it was anticipated that the displacement of the borehole to brine would under-balance the borehole relative to the reservoir, the reservoir pressure is uncertain and lack of flow to surface may have been caused by the reservoir being at a lower pressure than that exerted by the brine column on the reservoir," the firm said.
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Aurelian will now undertake additional analysis of the well and consider further testing options.
The first results from another site of work on the block have confirmed an active petroleum system extending around the Sosna-1 area.
John Smallwood, Exploration Director, said: "The oil encountered in Sosna-1 is an encouraging outcome as we move forward in realising the potential of the Zechstein deposits - Main Dolomite oil play in the Cybinka and Torzym licences.
"Elsewhere across the portfolio the key play and prospect de-risking activities are progressing well in order to improve the prospect inventory and prepare for the next phase of selective portfolio improvement and drilling."
The company also reported that NAMR, the Romanian regulator, has approved the new composition of the joint venture working interest equity levels for Aurelian (50%) and Romgaz (50%) in relation to the non-Bilca Gas Project Area in Brodina.
The NAMR has also confirmed the successful plug and abandonment of the suspended Boistea-1 well which is a condition required for final approval of the relinquishment of the Cuejdiu exploration licence.
In addition, 132 kilometres of 2D seismic data have been acquired across the West Karpaty area by United Oilfield Services and Geofizyka Krakow, meeting the commitment work programme on all four concessions which will now proceed into their next two year phases.
The share price fell 15.79% to 12p by 10:14.
NR
