Enegi Oil, the Manchester-based oil and gas exploration company that listed on AIM in March, said it has taken delivery of a rig that may allow it to declare its first proven reserves. The shares climbed 1.6 per cent to 160p.

The drilling is expected to take approximately 80 days.

Production tests to date have produced more than 24,000 barrels of high quality crude, and that TRACS International has estimated the field contains mean resources of 8.6 million barrels of oil equivalent.

Alan Minty, Enegi’s chief executive, said: “The results of the recent pressure test on PAP1-ST2 are very encouraging and a great first development in the overall drilling program.

“The horizontal sidetrack has always been our primary focus and it is forecast to be on production by the end of the year. The forecast levels of production from this well would make Enegi self-financing and allow us to deliver both our onshore and offshore development programs.”

Two external and one internal report commissioned by Enegi on the horizontal sidetrack have forecast that the well should produce between 2,000 and 2,500 barrels a day, plus associated gas, for the first year. Taking into account these levels of production and long-term price estimates, Enegi said it expects to be self-financing.

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