HAWKLEY Oil and Gas shareholders could be in for a good three months, with broker Hartleys tipping Hawkley?s shares to almost treble during the period to 63c.
Chernetska Well-1
The forecast came as Hawkley updated the market on their drilling in Ukraine, with production reaching 6.5 million cubic feet of gas per day and 220 barrels of condensate.
Meanwhile, it said its Chernetska-1 well has reached the second intermediate casing point at 2555 metres, and Hawkley is waiting for cement to dry before hitting the target B20 sandstone.
Hartleys said it expected the B20 target to be hit some time in October, and success from the horizon could add 20c per share, based on a conservative estimate, to Hawkley?s market value.
The broker also estimated a success rate of 75% from B20, and said there could be more upside if Hawkley decided to test deeper gas zones which have been estimated to hold more than 500 billion cubic feet of gas.
However, production at Hawkley?s Sorochynska-201 well has slowed in recent times, as production from the target reservoir has led to a natural decline in formation pressure.
It said it has the option to increase the choke size by 1mm to 9mm, and has done so for a trial period.
During the trial, production increased by 9% from 6.3MMcf per day to 6.9MMcfd.
Hartleys said the well had now generated $17 million in revenue for the company with a margin of 45%, and it valued the Sorochynska field at 45cps based on a three-well development.
The 45cps figure does not include independently assessed contingent resource estimates of 217Bcf and 5.6Mbbl.
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