Max Petroleum, the oil and gas exploration company focused on Kazakhstan, said it had begun testing on a well in the Asanketken Field.
The firm's shares rose 4% after it said it testing in a Jurassic reservoir at the ASK-J2 well from depths between 1,307 and 1,312 metres.
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It is good news for investors who have seen their shares tumble by 55% over the last week after Max said it was struggling to complete drilling at its NUR-1 well after "anomalously high pressure" left a drill pipe stuck at 5,772 metres.
However, that is far from Max Petroleum's only problem, as its exploration licence runs out in March 2013 and the technical difficulties clearly put that timeframe in danger.
This has led to some brokers to urge investors to sell up.
Merchant analyst Brendan Long said the broker was cutting its price to reflect "the increased risk for the NUR-1 well, heightened financial risk, reduced availability of capital for development funding and lower crude oil prices.
"In the immediate term we suggest selling out of the stock. The financial leverage of the company will magnify its operational challenges," Long said.
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