The UK Oil & Gas PLC (LON:UKOG) share price rebounded on Thursday following sharp declines after the announcement of operational problems in the Broadford Bridge well.
UKOG commissioned two independent reviews of the well which found the cement bonding wasn’t suitable for testing and further development would be required for a successful flow test. Cement-bonding is crucial to managing pressure in wells and allowing for advanced testing.
The news sent shares as low as 4.2p on Wednesday, the lowest level since the end of July.
The sell-off yesterday sent the share price through the 100-day moving average. The next level of strong support is likely to be in the 3p-3.5p region at the 50-day moving average and a series of closing prices posted in July 2017.
The set back will cause frustration among investors who have been eagerly anticipating results and further indication of commercial viability.
UKOG holds stakes in fields in the Weald Basin in the South or England, including one where the socalled ‘Gatwick Gusher’ is located.
Stephen Sanderson, CEO of UKOG commented:
The recovery of free, mobile light oil and solution gas to surface is significant and encouraging news and testament to the Kimmeridge Limestone reservoir’s ability to deliver hydrocarbons even from a less than optimal completion. The periods of good natural flow and identification of additional prospective reservoir zones to flow test add further positive outcomes.
Although the forthcoming workover presents additional unplanned work, the reservoir zone’s cement-bond integrity is readily rectifiable by the planned short cement-squeeze phase, a common-place and routine oilfield practice. The well will then be restored to an optimal condition for further
I am confident that the revised forward testing plan will be able to deliver the results that will help demonstrate BB-1 near term commercial viability.
Shares in UK Oil & Gas (LON:UKOG) traded 6% higher at 10.00am on Thursday.