LGO Energy: Trinidad Well Plugged Following Mechanical Problem

LGO Energy plc announced Monday that a cement plug has been set in the surface casing of well GY-678 in Trinidad, following a mechanical problem initially reported by the company September 18.

LGO attempted to recover downhole equipment, which was causing an obstruction below 9 5/8-inch casing, without success. As a result, the well has now been plugged with cement and the rig used to drill the well has been released, pending a decision on possible re-entry and sidetracking, or re-drilling, to reach the extensive C-sand net oil pay zone previously drilled and logged in the well.

In addition to the cost of the well and the unsuccessful recovery attempts totaling approximately $1.9 million, LGO is potentially liable for the cost of the lost downhole equipment of approximately $1.5 million. The loss of anticipated production from the well has also had a negative impact on the group's cash flow forecasts, according to LGO.

Neil Ritson, LGO's chief executive, commented in a company statement:

"Stuck pipe incidents are not common and despite taking extensive precautions during the drilling of the 15 new wells, this incident, which occurred at the very end of the program, is a setback for LGO. Whilst there is no long term impact to the company's assets and indeed the GY-678 well has shown that there is more and better C-sand reservoir than previously known, the short-term financial impact has to be managed. The company is still planning for additional Goudron Sandstone production and will report further on its plans in the coming months."

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