Several UK oil and gas firms welcomed in the spudding of the highly-anticipated Colter well in the Wessex Basin on Wednesday morning. Corallian Energy, operator of the licence containing Colter, announced that drilling had begun earlier in the day. Drilling is expected to take three weeks and reach an intended depth of 1,830m. Following completion, Corallian will evaluate the well.
Colter will appraise a historic discovery that lies immediately to the south of Wytch Farm, Europe’s largest onshore oil field. This has been assessed to contain gross unrisked mean prospective resources of 23MMbbls oil recoverable and a further 1MMboe of gas.
Baron Oil (LSE:BOIL), which holds an 8pc interest in the Colter licence, rose 7.3pc to 0.3p on the news. Chairman and chief executive Malcolm Butler said success at the would have a ‘material impact’ on Baron’s value.
Meanwhile, 10pc-owner United Oil & Gas (LSE:UOG) rose 5.26pc to 5p. Brian Larkin, chief executive, said:
‘The commencement of drilling operations at Colter is yet another key development for the Company. Colter is the second well United has participated in within the last twelve months, the first being the successful Podere Maiar well at the Selva gas field in Italy […] we believe Colter offers an excellent opportunity to emulate the success we enjoyed with Podere Maiar.’
Elsewhere, , Andalas Energy and Power (LSE:ADL), which holds an 8pc stake, sat flat at 0.9pc on the news. Regardless, chief executive Simon Gorringe expressed the firm’s pleasure with the development in an upbeat statement:
‘We are delighted to announce the spud of the Colter appraisal well, which we invested in because of its attractive risk return profile. Colter is the first well to be drilled in which Andalas has an interest since I became CEO and we look forward to announcing the results of this well, whilst the Andalas team continues to work on the other opportunities in our portfolio.’
Finally, Reabold Resources (LSE:RBD), which owns 49pc of Corallian Energy to give it a 16.1pc effective stake in Colter, rose 1.9pc to 0.8p on the news.
Co-chief executive Sachin Oza said: ‘Colter is a high value opportunity which, if successful, could create considerable value for Reabold and its shareholders. With prospective resources of 23 million barrels of oil equivalent potentially de-risked by this well, we look forward to providing further updates on Colter, and other drilling activity in our portfolio of assets, in due course.’