Proactive Investors
Ian Lyall
The well will be drilled to a vertical depth of 2,977 metres.
Sound Energy PLC (LON:SOU) said its latest well on the Tendrara licence in Morocco has reached the final casing point.
TE-8’s liner is being cemented at a depth of 2,603 metres and is just two metres from the main reservoir in the TAGI formation. The well will be drilled to a vertical depth of 2,977 metres.
Assuming gas is encountered in the main well bore, a further 30-day side-track will be drilled to prove a potentially deeper gas contact 900 metres to the north-west.
TE-8 is around 12 kilometres from the last successful hole and is what’s called a step out well because it will test the lateral extent of gas that has been discovered in the TAGI reservoir.
Whatever comes in the next two months, the firm has already enjoyed considerable success at Tendrara.
Results from TE-7 were revealed on January 19 with the company telling investors that over a 56 day period of continuous flow the well has yielded just under 1bn cubic feet of gas.
That figure is made all the more impressive given that the gas flow was constrained in test conditions, at a maximum of 40% drawdown, in order to protect the integrity of the well completion to date.
No formation water was produced during testing – as the company had expected – and there were no indications of barriers.
As such Sound said that the result had confirmed a “significant connected volume” of gas is present at Tendrara, and it would now monitor pressure across past wells to confirm the physical connectivity of the reservoir.
The programme on TE-8 is scheduled to last 40-50 days, according to the City research firm Capital Networks.
It is one of a number of value-accretive catalysts expected in 2017, said Capital’s analyst, Lionel Therond.
“We believe the stock provides investors the opportunity to gain exposure to one of the few growth story in the sector, with the potential to benefit from substantial appreciation as assets get de-risked and material resources are added,” he said in a note.
Earlier this week Sound said it had begun drilling the hotly-anticipated Badile well in Italy, adding more spice to the investment story.
Sound’s Italian assets were the foundation stone on which the company was built and it has two producing wells – although their output is modest.
Badile, however, could be a changer. An independent assessment suggests the target could be host to around 178bn standard cubic feet of gas with a net present value of £400mln.
That figure is what’s called a ‘best case’, unrisked estimate. It sits at in the middle of the range with the ‘high case’ forecast being 670bn cubic feet and the ‘low case’ 46bn cubic feet.
Anyway, work on the well, located in the north of the country, around 10 miles from Milan, began on Tuesday (March 7).
The plan is to go down to a total depth of 4,445 metres with drilling and logging expected to take 100 days.
Assuming gas is found, it will take a further 25 days for completion and testing.
Ian Lyall
