Falkland Oil & Gas (ISE: FOGL.L) was steady at 70 pence in early London trade this morning after the resources explorer stated it had discovered gas within its Loligo exploration well.
Falkland Oil & Gas said the Loligo well had confirmed "a working hydrocarbon system in the northern part of the East Falkland basin". The group also said the drilling had demonstrated Loligo was a "viable stratigraphic trap."
Tim Bushell, chief executive of Falkland Oil & Gas, commented:
The initial results of the Loligo well are encouraging. They have demonstrated that hydrocarbons have migrated into the Tertiary Channel Play. It is also clear that Loligo is a valid trap that contains multiple gas bearing zones, with over 100 metres of hydrocarbon bearing reservoir. We now need to focus on reservoir distribution within Loligo in order to find the sweet spots. A work program will be undertaken to achieve this, assess the resource potential and commercial viability of this discovery.
Bushell added that further detailed evaluation of all the well data, together with the existing "seismic," was now required in order to "better define reservoir distribution and more precisely map the channel systems." He said that determining the reservoir potential using "detailed petrophysical evaluation" would be undertaken once the sidewall core samples had been analyzed back in the U.K.
The shares of Falkland Oil & Gas are a good example of how small resources shares can provide wonderful profits for investors. The price rallied from 53 pence to 244 pence between 2008 and 2010, and you never know, positive news from other wells could see further handsome gains.
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The article Falkland Oil & Gas Confirms Discovery originally appeared on Fool.com.
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