Cove rises on well success

East African oil and gas explorer Cove Energy saw over a 10% rise in its share price on Monday morning after the firm achieved its thickest gas pay to date at the Barquentine-3 appraisal well in the Rovuma Basin Area.

The Barquentine-3 well, which is operated by Anadarko Petroleum, is the sixth successful well to drill in the now world class Windjammer, Lagosta, Barquentine and Camaro (WLBC) gas complex.

Recoverable resource ranges for the WLBC gas complex are now estimated to be 15 to 30+ trillion cubic feet of recoverable natural gas, with an estimated 30 to 50+ of natural gas in place.

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The Deepwater Millennium drill ship is being mobilised to commence flow and interference testing and a new 4 year extension for the Belford Dolphin drill ship will ensure a continuous appraisal and exploration drilling programme.

The firm was keen to emphasise that analysis of the new seismic data has identified a growing number of high-potential prospects in other areas in Area 1 Rovuma Offshore.

Chief executive officer John Craven said: "Barquentine-3 encountered outstanding Oligocene gas saturated reservoirs in terms of thickness and rock quality.

"There is also deeper untested potential in existing discoveries. Future plans include drilling three further appraisal wells and flow testing, both running parallel to exploration drilling, throughout this prolific block."

Broker Westhouse Securities, which specialises in resource stocks, was suitably impressed with the announcement.

"This is another positive drilling result for Cove offshore Mozambique. As a result, we are increasing our resource estimate for the WLBC complex to 15.2tcf [trillion cubic feet]," the broker said.

"Our other estimates for Tubarao, of 2.0tcf and additional on-block prospects/leads of 15tcf remain unchanged. As such the shares remain a BUY and our target price increases to 124p," Westhouse added.

The share price 10.41% to 87.5p by 13:03.

NR