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Iraqi Kurdistan disappointment sends Sterling Energy south
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Iraqi Kurdistan disappointment sends
Sterling Energy south
By Esther Armstrong
Shares in Middle East and Africa-focused explorer
Sterling Energy (SEY) lost almost a quarter of their
value on Monday after flow tests from its Kurdistan
The AIM-traded company said commercial hydrocarbon
flow rates had not been demonstrated within the
deeper horizons of the Sangaw North-1 well.
In response investors widely sold-off the company
and its shares fell up to 30%, before pulling back
to sit 23% lower at 35p.
The flow test was completed across the open hole
section of the well between the depths of 3,338
metres and 4,190 metres.
It flowed at a stabalised rateof approximately 4.6
million standard cubic feet of gas and 7,280 barrels
of formation water per day during a 12-hour flow
Sterling said approximately 74% of the produced gas
was hydrocarbon, with the remainder made up of 24%
hydrogen sulphide and 2% carbon dioxide.
The result of the flow test is the latest in a
string of disappointments faced in the region by the
company, which has lost almost 70% of its share
value in the last 12 months.
The firm has said no further flow testing is planned
in the open hole section of the well and this
section will be isolated with cement plugs.
Angus MacAskill, chief executive at Sterling, said:
"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. 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
Each of the shallower flow tests, including
prepatory operations, is expected to take
approximately three weeks to complete.
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