LONDON (ShareCast) - After numerous false starts and lack of delivery, oil exploration group San Leon Energy has claimed it may have found its first commercial gas discovery.
San Leon has unveiled test results that it believes show the Rawicz-12 appraisal well, located in south-western Poland, will be commercial in scale, having met the firm's expectations for gas quality and with no water nor hydrogen sulphide encountered.

To date, the well flowed at an increasing rate of 4.1m cubic feet per day (mmcfd).

However, as the well was drilled vertically through the reservoir, horizontal wells might actually achieve even higher flow rates, San Leon explained.

Westhouse Securities wrote that: "Given high gas prices in Poland and the adjacency of the field to existing infrastructure, this is a highly significant commercial gas discovery which will be converted to a producer in due course."

Analysts Mark Henderson and Jamal Orazbayeva added "this strong well result could mark the start of a sustained turnaround in operational, financial and share price performance."

An additional between three to five wells will be drilled to develop the field.

San Leon holds a 35% equity share in the first two wells and faces no up-front drilling costs linked to those.

As of 08:50 shares of the AIM-listed outfit were rocketing 68.1% higher to reach 1.9p, giving it a market capitalisation of £30.51m.

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