Northern Petroleum posts 'outstanding' result from Canadian well

21st Oct 2014 15:30

Northern Petroleum has reported positive results from drilling at an oil and gas project in Canada, boosting its shares.Northern said its first well targeting the Keg River edge reef tested at a constrained rate under natural flow of more than 1,300 barrels of oil per day.Two other wells drilled were less promising, but the group said they still helped it to understand the production potential of the area, increasing the chances of drilling more high production wells as the project progresses.The group expects to raise production from the three initial wells targeting the Keg River edge reef to up to 250 barrels per day by the end of the year from a current combined restricted rate of about 140 barrels a day.The group expects them to produce up to 650 barrels a day eventually, at which point it is set to become cash-flow positive.It also expects to have a cash position at the end of the year of more than $12m.Chief executive Keith Bush said: ""The production capacity of the first well in this campaign is outstanding and it does not take many wells of this calibre to significantly increase the value of the whole project. This well demonstrates the ability of the area to still produce high value production wells."Shares in Northern rose 2.75p or 20.4% to 16.25p at 15:46 in London.