Premier Oil’s second assessment well in the Zama project off the coast of Mexico has shown more oil potential, raising hopes of finding large oil fields.
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Premier shares a 25% stake in the area with Taros Energy and Sierra Oil and Gas, and its share price rose more than 4% in early trading.
The company said that the total net percentage of rock representing the amount of oil and gas that can be stored reached 73%, which is higher than pre-drilling estimates and 63% higher than its first evaluation well.
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Chief Executive Tony Durrant said: “This is a good start for the Zama Block 7 evaluation project in Mexico. It enhances our interpretation of Zama’s large discoveries and our confidence in resource estimates.
Premier said the reservoir quality was similar to Zama1 and met expectations.
David Round, an analyst at BMO Capital Markets, said the results were positive and he expected it would “boost confidence in Zama’s trading volume forecasts.”
However, the company said it had found no oil in a deeper exploration prospect called Marte.
Premier said it would now drill another well based on the original well of Zama-2 evaluation well, which was deepened to assess the high-risk Marte exploration prospects.
Taros Energy said Wednesday that the initial phase of the assessment plan was completed about 28 days ahead of schedule, which is 25% cheaper than the original plan.
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