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Leni Gas & Oil: Production from first Goudron well expected shortly

Published: 18:24 19 May 2014 AEST

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Production from Leni Gas & Oil's (LON:LGO) GY-664 well in Trinidad will kick off shortly, now it has been cased to total depth.

The successful GY-664 hit more than 1,500 feet of gross sand in three formations -  the Goudron, Gros Morne and Lower Cruse.

Now, the firm will penetrate between 270 to 300 feet of Gros Morne oil - turning the well into a Gros Morne production well - to optimise production from the overall gross sandstone interval.

All three formations were found to host oil - with 300 feet net pay in Gros Morne, 192 ft in Goudron and 79ft in the Lower Cruse.

Simultaneous production of the Lower Cruse and Gros Morne is not possible due to the different pressures.

Leni's chief executive Neil Ritson said: "Completion of the extensive oil pay in the Gros Morne in GY-664 presents the best production potential in the first well.

"The Goudron Sands can be completed at a later date.  The next well, GY-665, will be drilled to at least 3,500 feet and will investigate the Lower Cruse in a different structural setting."

The second well - GY-665, in the programme of 30 planned at the Goudron field, will be spudded shortly, Leni added.

Broker Old Park Lane said: "With the Gros Morne being the largest zone of net pay, the completion of this zone for production is the logical solution. 

"Production is expected to commence shortly and LGO also expects that the shallower Goudron Sands can be completed at a later date to enhance production from the well. The next well in the programme is expected to test the Lower Cruse interval in a different structural setting."

It rates the shares a 'buy' with a target price of 3.3p.

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