Leyshon Resources shares rocket on positive drill results

Shares in AIM-listed gas producer and explorer Leyshon Resources rose sharply on Tuesday morning after the company announced positive flow test results by its wholly-owned subsidiary, Pacific Asia Petroleum (PAPL), from its Zijinshan Gas Project in China.

The group reported that following the hydraulic facture stimulation of one of the target zones in well ZJS5, located on the eastern fringe of the Ordos Gas Basin in Central China, a free gas flow rate of 160,000 standard cubic feet per day (scf/day) had been achieved over eight hours of stable flow at a tubing head pressure of 200 pounds per square inch (psi).

The initial flow rate recorded on the single zone exceeded management's internal estimate for commercial production of 125,000 scf/day and analysis of the results suggested that further flow could be possible from untested potential pay zones, Leyshon reported.

Start your trial of MoneyWeek today

Get unparalleled financial insight, analysis and expert opinion you can profit from.

Start your trial

Sign up for MoneyWeek’s free twice-daily newsletter.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Sign up

The group said that the well had been 'shut in' for a period of two weeks during which pressure tests would be undertaken. It added that testing of well ZJS6 remained ongoing and flow test results would be reported as they came to hand.

Paul Atherley, Managing Director of Leyshon Resources, commented: "We are delighted to report that one of the two first wells drilled has recorded commercial flow from a single pay zone with further production possible from additional zones."

He added: "Well ZJS5 is located in the heart of the target area and this positive result is a very encouraging early step in de-risking the project."

Leyshon Resources' share price was up 28.23% to 19.88p at 08:13 on Tuesday morning.

MF