Urals Energy flags delay at South Dagi

The AIM-traded firm said it considered that the results provided indications of a “potentially significant” discovery.

It said the analysis of the core samples taken from 950 to 1,500 meters of well number 1 showed that in nine horizons, there were shows of hydrocarbons with “good” porosity, with total net pay of 154 meters.

However, the full testing of the well, which would be required to confirm its significance, would be delayed for “at least” two months, due to a collector pipe becoming stuck in the well below 1,100 meters during the completion process.

“Removing this pipe will require special equipment that is manufactured and available in Russia, which is required to be brought to the island,” the Urals board said in its statement.

“The recovery work will then be carried out by the group's own work over rig, so that the group's new rig can be moved from well number 1 to an already prepared site for our second exploratory well, well number 2.”

In the meantime, Urals said the the workover rig would re-enter well number 12, to establish that well as a water injection well, which would be linked to the earlier well number 7, the results of which were announced on 19 June.

Well number 7 had been producing 225 bbls/day from horizons mirroring those of well number 1, and also produced “significant” water, which had to be separated at Urals’ Petrosak refinery.

“The company's intention is to set up a water separation plant at South Dagi, and re-inject the water into well number 12 once the work over is complete.

“In the meantime, well number 7 has been shut in.”