Following the Times article yesterday which stated that the Liz field drilling had not encountered commercial quantities of oil, Desire Petroleum have today released an RNS (see below). The key part of the RNS "oil may be present in thin intervals but that reservoir quality is poor" indicates that the Times story was broadly correct although further testing is clearly in progress. Things aren't going to go well for the share price this morning when the market opens at 8am.
Due to recent press speculation, Desire Petroleum wishes to announce that the Liz 14/19-1 well, in the North Falkland Basin, has reached a depth of 3570 metres and logging is underway.
The primary Liz target was encountered at around 2550 metres with indications of hydrocarbons while drilling. Subsequent logging operations have shown that oil may be present in thin intervals but that reservoir quality is poor. Wireline sampling is still to be carried out. Deeper gas shows have also been encountered while drilling, particularly below 3400 metres and these have still to be evaluated by wireline logging and sampling.
Until the logging is complete and the results analysed it will not be possible to determine the significance of the hydrocarbons encountered and whether the well will need to be drilled deeper, suspended for testing or plugged and abandoned.
Operations are expected to be completed later this week when a full announcement will be made.
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