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UPDATE - LGO's latest well at Goudron gushes at over 1,000 bpd

Last updated: 22:22 15 Dec 2014 AEDT, First published: 23:22 15 Dec 2014 AEDT

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Alexander Nubia’s flagship project, Hamama VMS, has a number of characteristics that are similar to other major VMS deposits in the Arabian Nubian Shield

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LGO Energy (LON:LGO) shares gained about 50% on Monday after revealing an outstanding success of a new well at the Goudron oilfield in Trinidad.

The GY-670 well, one of eight drilled this year, is now producing at a restricted rate in excess of 1,000 barrels per day.

For context, at the start of December the group as a whole reached it’s the 1,250 barrels per day production milestone.

It perforated a 177-foot interval of oil pay in the C-sands target and had flowed at an average rate of 1,104 bopd over the last 48 hours.

The flow rate has now stabilised at a highly restricted rate of 1,085 barrels of oil per day (bopd) of 37 degree API water-free oil.

LGO added that the initial open-hole flow rate calculated for the well exceeds 6,000 bopd.

Neil Ritson, LGO's chief executive, said: "The first of the three wells on Pad-3, and the sixth completion in the eight wells we have drilled in 2014 has provided our best initial oil rate to date.

“Higher reservoir pressures in this area of the field combined with further improvements in drilling and completion techniques have given us the highest flow rate ever seen in the Goudron Field.

“Two further wells, GY-671 and GY-699, have yet to be placed on production on Pad-3."

Khalid Hassanali, Petrotrin President, commented: "The Petroleum Company of Trinidad and Tobago Limited (Petrotrin), Trinidad and Tobago's State oil company, has an alliance with LGO at the Goudron Field and welcomes this excellent well result from GY-670 and congratulates LGO on their 2014 drilling campaign that has resulted in significant oil production from Goudron."

Barney Gray, analyst at Old Park Lane Capital, said the enhanced performance will offset much of the impact of lower oil prices.

“Although investors should guard against runaway expectations for the next two well completions on Pad-3 in particular, this is undoubtedly great news for LGO in the context of significantly increased group production going into 2015,” he said.

On AIM, LGO shares were up 1.28p, 53%, trading at 3.68p.

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