Sterling Energy slumps on flow test setback

13th Jun 2011 11:34

Sterling Energy lost a quarter of its value in early trading on Monday, sinking to a 52-week low, after a disappointing open hole flow test at its Sangaw North-1 well in Kurdistan.The well flowed at a stabilised rate of around 4.6m standard cubic feet of gas and 7,280 barrels of formation water per day during a 12 hour flow period through a 1.5 inch choke with a well head pressure of 470 pounds per square inch. Around 74% of the produced gas was hydrocarbon gas with the remainder comprising 24% hydrogen sulphide and 2% carbon dioxide.No further flow testing is planned in the open hole section of the well and this section is being isolated with cement plugs."We are disappointed that the open hole flow test has not demonstrated commercial hydrocarbon flow rates within the deeper horizons of the Sangaw North-1 well," said Angus MacAskill, chief executive of Sterling.Sterling has a 53.33% working interest in the Sangaw North block."The data acquired during this test will be integrated with all the other data acquired in well operations to determine the potential of these horizons. We look forward to the outcome of the two cased hole flow tests to be conducted in shallower formations," MacAskill added. ---jh