Eaglewood up 40% on TSX

Business, Normal

The National- Thursday, February 10, 2011

 SHARE prices of Canadian  junior oil and gas explorer Eaglewood Energy (Eaglewood) on Tuesday jumped more than 40% in afternoon trading at the Toronto Stock Exchange following the announcement of a discovery at the Ubuntu-1 well in Papua New Guinea.

Ubuntu-1 well is located on petroleum prospecting licence 259, some 17km east of the Ketu and Elevala gas condensate discoveries. 

Eaglewood is the operator of the licence, with a 40% participating interest in the Ubuntu Area and a 90% interest in the rest of the 259 licence.

Eaglewood yesterday confirmed in a statement that the well intersected at least 10m of net gas bearing Elevala Sandstone from 3,305m.  

Wire line pressure testing of the sandstone confirmed a condensate rich gas gradient, and also suggested that the sandstones are of “good quality and will flow gas and condensate”.

Eaglewood said the gradient was similar to nearby offset wells Elevala and Ketu, “suggesting that the gas could have similar properties”.

The well also failed to hit a water contact, opening up the potential for additional gas discoveries below the newly discovered net pay zone, Brad Hurtubise chief executive said.

“The Ubuntu-1 discovery is a great result for Eaglewood.

“We are very pleased to have this new pool discovery confirming that PPL-259 is situated in a very prospective hydrocarbon fairway. 

“What we have learned from this well would help us better interpret the seismic we are acquiring over the numerous other prospects we have in the vicinity of Ubuntu and the existing PRL 5 discoveries and to attract farm-in partners to drill some of these prospects.” 

The proximity of Ubuntu-1 to the Ketu and Elevala discoveries on PRL 5 some 20kms away enhances to opportunity for a coordinated gas condensate development in the area.

Hurtubise said the discovery would help the company better interpret additional seismic acquisitions planned for other prospects in the vicinity.