Beacon Energy – oil & gas company shines a light on its Schwarzbach-2 well on the Meletta reservoir,
Beacon Energy – oil & gas company shines a light on its Schwarzbach-2 well on the Meletta reservoir, with over 1.56bn shares traded in the first couple of hours
The star performer this morning has been Beacon Energy (LON:BCE), the full-cycle oil and gas company whose shares have risen nearly 42%, with some 1.6bn traded as I write.
Today’s news that has excited the market concerns the announcement that the company’s Schwarzbach-2(2.) well has encountered good quality oil-bearing reservoirs in the Meletta-Schichten sandstones and the Pechelbronner-Schichten sandstones within the Stockstadt Mitte segment of the Erfelden field, which is onshore Germany.
Initial analysis of an electric wireline logging programme shows porosity ranges above pre-drill expectations in the Meletta sandstones and the Pechelbronner-Schichten (PBS) sandstones.
No water-bearing sands were encountered in the Meletta or the PBS oil-bearing intervals that were also encountered c.25m higher than prognosis, which has positive implications for the pre-drill reserve estimates.
Beacon now plans to undertake reservoir clean-up, production testing and install the production liner to bring the SCHB-2 well into production over the next month, through the existing Schwarzbach facilities.
The company commented that the data from the SCHB-2 well will help to de-risk the 2C contingent resources of 2.4mb assigned to the adjacent Schwarzbach South segment which will be targeted at a later stage.
Analyst David Mirzai at SP Angel stated that the SCHB-2 well was anticipated to have low geological risk as it was twinning the SKM1 well drilled by Exxon in 1986, which proved hydrocarbons in the Stockstadt Mitte segment in the PBS sandstones and the shallower ME sands.
However, he notes that the reservoirs were both intercepted shallower than predicted with the PBS being a thicker interval with more sand and of better quality than pre-drill estimates, which implies volumetric upside to the pre-drill reserve range.
He concluded that shareholders should look forward to the completion of the SCHB-2 development well, which should materially boost production and cash flows to further drive the investment story.
The shares are now trading at 0.145p, up 0.430p.