Leyshon Resources Limited (Leyshon or the Company) announced Tuesday that its wholly owned subsidiary Pacific Asia Petroleum Limited (PAPL) has completed the drilling and electric logging of well ZJS7, the Company’s third well on its Zijinshan Gas Project on the eastern fringe of the prolific Ordos Gas Basin in Central China.
Well ZJS7 is located approximately 1.8 miles (3 kilometers) to the northeast of well ZJS5, in the central part of the 146.7 square miles (380 square kilometers) central depression area. The well was drilled without safety incident to a total depth of 7,434.3 feet (2,266 meters).
The analysis of logs and samples is ongoing, however initial results have indicated that multiple potential pay zones have been encountered, a number of which have exhibited relatively high porosity measurements. The potential pay zones intersected include deeper zones which are the main production horizons elsewhere in the Ordos Basin. A few of the zones have exhibited relatively low resistivity suggesting that water may be present.
Side core samples have been taken and a decision will be taken on which zones will be flow tested once the laboratory results and the final logging interpretation results have been received and analyzed.
Overall the initial results have so far calibrated well with the recently acquired seismic data. The interpretation of the central depression area has been confirmed as relatively flat, bounded between the outline of a large magmatic intrusion in the west and regional scale faulting in the east, and rising slightly to the north.
Overall the program remains at a relatively early stage in the exploration and appraisal phase of derisking the project and accordingly each well will be fully evaluated before proceeding with the subsequent well which is likely to result in slower progress in the overall program than originally planned.
Managing Director Paul Atherley commented:
“The intersection of further potential pay zones in Well ZJS7 is encouraging and once the laboratory results are received we will compare them with those from nearby well ZJS5 to determine the next step in the program.
An assessment of the rate of progress of the ongoing program will be undertaken once we have the full results from the latest well and we will advise as soon as it has been finalized and agreed with our partner.”
The Company is well placed to carry out its 2013 exploration and appraisal program with a strong cash position of $38 million (unaudited) held mainly in U.S. dollars. With 249 million ordinary shares in issue this represents approximately $0.15 per share, AUD 0.17 per share and GBP 0.10 per share. The cash position does not take into account interest due nor all of the current liabilities.
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