Leyshon Resources Limited Commenced Drilling Well ZJS7 (9040J)
July 23 2013 - 2:01AM
UK Regulatory
TIDMLRL
RNS Number : 9040J
Leyshon Resources Limited
23 July 2013
23 July 2013
Leyshon Resources Limited
Commenced Drilling Well ZJS7
Leyshon Resources Limited (AIM/ASX:LRL) ("Leyshon" or the
"Company") provides the following update from its Zijinshan Gas
Project, located on the eastern fringe of the prolific Ordos Gas
Basin in Central China.
Its wholly owned subsidiary Pacific Asia Petroleum Limited
(PAPL) has commenced drilling well ZJS7 at a location approximately
three kilometres to the northeast of well ZJS5, in the central part
of the 380 square kilometre central depression area.
Torrential rain has delayed the mobilization of the rig for over
two weeks. The storms have resulted in the deaths of four people,
affected 840,000 others, of which 28,000 have been evacuated. The
Ministry of Civil Affairs has dispatched relief teams to the most
affected areas of Shanxi Province.
Now that the rig has been mobilized the extreme weather
conditions are not expected to have any further significant impact
on the drilling operations which are expected to take approximately
4-5 weeks.
The well has a design depth of 2,300 metres and is targeting the
same potential pay zones as those intersected in well ZJS5.
The recently completed formation pressure test in well ZJS5,
after a three week shut-in period, recorded 16.5MPa/2425psi on a
single zone, significantly higher than that recorded in nearby
wells in the same strata.
Well ZJS7 is the first of three wells to be drilled as part of
this year's accelerated exploration and appraisal programme. A
further three wells are planned to be drilled based on favourable
results from both drilling and testing, and on partner approval.
All wells are expected to be flow tested in the event they
intersect zones that warrant testing.
It should be noted that the programme remains at an early stage
in the exploration and appraisal phase of de-risking the project
and accordingly each well will be fully evaluated before proceeding
with the subsequent well.
Managing Director Paul Atherley commented:
"Well ZJS7 is the third well in the overall eight well programme
and has been located based on the interpretation of the recently
acquired 318 kilometres seismic data and the results from well
ZJS5.
The focus remains on the outcome at the end of the exploration
and appraisal programme with a view to generating a resource by the
end of the calendar year."
The Company is well placed to carry out its 2013 exploration and
appraisal programme with a cash position of US$40 million
(unaudited). The majority of the cash is held in US dollars. With
249 million ordinary shares on issue this represents approximately
A$17 cents per share and 10 pence per share. The cash position does
not take into account interest due nor all of the liabilities for
the first two wells.
For further information please contact:
Leyshon Resources Limited
Paul Atherley - Managing Director
Tel: +86 137 1800 1914
admin@leyshonresources.com
Cantor Fitzgerald Europe
David Porter/Rick Thompson (Nominated adviser)
Richard Redmayne (Corporate broking)
Tel: +44 (0)207 107 8000
Pelham Bell Pottinger
Charles Vivian /James MacFarlane
Tel: +44 (0)20 7861 3232
Background
http://www.leyshonresources.com
Leyshon was on the ground in 2003 when China opened its mining
sector to foreign investment. It has been fully engaged in China
since then and has its main operating office located in Beijing.
China overtook the United States as the world's largest energy
consumer in 2010, however on a per capita basis it still only
consumes about 25% of the energy of the most developed nations. The
government has recently described the country's increasing
dependence on foreign energy sources as one of the "Grave
challenges to energy security".
Its main policy response to this challenge is the rapid
development of domestic unconventional gas resources, with a
particularly focus on the Eastern Flank of the Ordos Basin. The aim
is to rapidly increase the output of unconventional gas from the
currently very low levels to an annual production of 6.5 billion
cubic metres by 2015.
Leyshon, along with its partner CNPC, is one of small number of
companies exploring for and looking to develop unconventional gas
production in the Eastern Flank of the Ordos Basin. Managing
Director Paul Atherley is the Vice Chairman of the China Britain
Business Council and serves on the European Union Chamber Energy
Working Group.
The qualified person, Frank Fu, who has reviewed this update,
has 21 years' experience in the oil and gas industry and is a
member of the Society of Petroleum Engineers. He holds a Bachelor
of Science in Geology and Exploration from Shanxi Mining College in
Taiyuan, Shanxi. Frank is currently the Chief Operations Officer
for the PAPL and is based in the Beijing office. He joined Company
in 2012, prior to this he spent the majority of his career with
ConocoPhillips in China and located at overseas gas and oil
projects.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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