Reabold Resources (LSE:RBD) fell 3.2pc to 0.6p on Tuesday after revealing that the spudding of a critical well at its Romanian interest will occur ‘later than previously planned’.
The business owns a 33pc stake in Danube Petroleum, which in turns owns 100pc of the Parta Exploration Permit- home of the Ieca Mare production licence. On Tuesday, Reabold highlighted an announcement by ADX Energy – which owns the remaining 67pc of Danube – noting that a planned two-well appraisal programme on Parta is expected to begin in late June.
The spudding of the first well – called IM-1 – has come later than expected because Danube wishes to drill it from within the Ieca Mare licence. To do this, it had to transfer the licence formally from a business called Amromco – a process that began last October – before Romania’s government could issue a drilling permit.
What’s more, despite the Amromco licence acquisition completing around six months ago, the full data for prospect evaluation and planning was not handed to contract operator ADX until late December.
Danube believes it can put IM-1 onto production in a relatively short timeframe. The well is targeting multiple pay zones, including established appraisal potential from wells drilled in the 1980s. These were tested but never produced. Reabold said the well also has exploration potential defined on recently acquired 3D seismic data. An independent report last year assessed contingent and prospective resources potential of 18.8bcf on a P50 basis for the well.
Meanwhile, the second well in the programme – IM-2 – is found within the Parta exploration permit but is based outside of the Ieca Mare licence. Including deeper exploration potential, the two wells have been assigned contingent and prospective resource potential of 49.9bcf.
Despite the timeline announced on Tuesday, Reabold noted that Danube must still acquire an environmental permit and construction authorisation before it can spud IM-1. ADX is confident that these can both be secured by the end of next month.
Elsewhere, Reabold noted that Danube is fully funded for the estimated $3m cost of drilling IM-1. This price includes evaluation, logging, and running casing.
Tuesday’s news comes two weeks after Reabold announced that the severe weather conditions impacting its California drill programme have passed. Earlier this month, the firm said that its 50pc-owned Monroe Swell drilling site has now dried out following a ‘prolonged period’ of bad weather.
Drilling equipment was delivered to the well pad at the end of February. This was shortly followed by the spudding of a well called Burnett 2A, marking the first of two wells at Monroe Swell that Reabold will fund in exchange for earning to a 50pc position in the acreage.
Reabold first announced that it had been forced to change its drilling schedule due to the problematic conditions back in December. Its US contract operator Integrity Management Solutions said access to Monroe Swell had been hindered, preventing it from spudding a well in the area.
Reabold entered the US in June last year when it acquired US-focused oil and gas firm Gaelic Resource for £3m. This gave it the option to participate in West Brentwood, Monroe Swell, and another lease called Grizzly Island. The assets have a combined value of up to $235m net to Reabold according to Integrity.