Rockhopper Exploration plugs and abandons Ernest well, set to test Sea Lion discovery

North Falkland Basin operating oil and gas explorer Rockhopper Exploration (LON:RKH) is preparing to flow test its Sea Lion discovery well after plugging and abandoning the Ernest 26/6-1 exploration well.
Ernest 26/6-1 proved to be a dry hole after all logging runs were completed.
The Ocean Guardian drilling rig will now proceed to the Sea Lion location where the company will carry out a flow test on the Sea Lion discovery well 14/10-2 after submitting the final design of the test programme to the Falkland Island government.

The Sea Lion well has so far been the sole success of the widely anticipated and closely followed drilling campaign in the Falklands. Analysis performed on the well in June showed that it had discovered medium gravity oil.

The analysis of the discovery confirmed the first contingent resource in the Falklands, and upped the recoverable resource estimates from 170 mmbbls (million barrels) to 242 mmbbls.
Rockhopper believes that the well has opened a fairway to licenses PL032 and PL033 and will now test the well “at the earliest opportunity” during the current campaign.
The flow test is expected to give an early indication of the production potential of the reservoir sands and will be a key part of the planning process required to move forward to full appraisal and possible development programmes.
The news didn’t have much of an impact on the company’s share price and the stock was little moved this morning.
The wider Falklands play is made up of two separate basins, the North basin and the South basin. Rockhopper and Desire Petroleum (LON:DES) have been drilling their interests in the North basin, and Borders & Southern (LON:BOR) and Falkland Oil & Gas (LON:FOGL) have prospective interests in the South Basin.
Recently, another company entered the fray, with Argos Resources (LON:ARG) joining London’s AIM market. Argos owns a number of prospective interests in the North Falkland basin, and with the support of a recent £22m fundraising it plans to identify drill targets with a 3D seismic acquisition slated for 2011.