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.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
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
-
Shein shifts IPO focus to Hong KongThe development piles fresh pressure on London’s beleaguered stock market, which many had hoped would be boosted by Shein’s IPO
-
Scientists turn lead into gold – could it wreck the yellow metal's price?Medieval alchemists have been vindicated after scientists turned lead into gold, but the results aren’t going to crash the gold price any time soon
