LGO Energy confirms GY-682 well now on production

Shares in LGO Energy are down more than 2% after confirming its first development well, GY-682, is now on production at a stable initial rate of 55 bopd of light sweet crude oil.

It was drilled to a total depth of 1145 feet measured depth and perforated over a 273-foot interval of net oil pay within the Mayaro reservoir.

Chief executive Neil Ritson said that as the momentum was restored in the LGO business it was encouraging that the first of its programme of infill wells had come on production above the expected average rate whilst remaining on time and budget.

"Our production base is now growing and management is confident that a sustained campaign of low risk drilling to the shallow Mayaro formation will substantially raise production, in parallel with work on the planned waterflood project," said Ritson.

GY-682 was one of a programme of planned Mayaro infill wells, each of which was forecast to have average initial production rates of 45 bopd of light sweet crude, with historically low decline rates shown by over 100 existing field wells to be consistently less than 20% a year.

The second well, GY-683, was expected to spud in the next few days and was targeting a similar interval of proven oil pay in the Mayaro Sandstone.

At 12:34 GMT, shares in AIM-listed LGO were down 2.34% to 3.12p each.