PMO shares opened up 6% in early trading on Friday
Companies: Harbour Energy Plc
Premier Oil released results of the Bagpuss oil prospect this morning. The market reacted positively to the results, with PMO trading up 6% early on Friday.
According to Premier Oil, the well encountered 41 feet of hydrocarbon-bearing sands within a 68 feet hydrocarbon column, in line with pre-drill estimates. PMO said the sands have between 25% and 33% porosity and indications are that the oil is heavy.
Robin Allan, Director of Exploration and North Sea, commented:
"The Bagpuss well has proven a significant volume of oil in place. We will now work with our partners to carry out a full analysis of the hydrocarbons and reservoir encountered to ascertain whether commerciality can be established."
City brokers VSA Capital and FirstEnergy Capital published updates on the results. VSA struck a positive tone, saying that pre-drill estimates were that Bagpuss and Blofeld heavy oil prospect could contain up to 2Bbbl, provided PMO can commercially produce it:
"If PMO and its partners can prove commerciality this could open up a new play."
In contrast to VSA, FirstEnergy took a more cautious tone with analyst Stephane Foucaud highlighting the issues Premier Oil might have in production:
"...the bottom oil temperature was at the lower end of expectations and as a result, oil will be less mobile than initially hoped for. Further tests will be required to assess oil mobility which is the key challenge to get a handle on commerce”
