LONDON (ShareCast) - Leyshon Resources, a China-focused gas exploration outfit, said Wednesday that its wholly owned subsidiary, Pacific Asia Petroleum, has delivered positive initial results from its second well on its Zijinshan Gas Project on the eastern fringe of the prolific Ordos Gas Basin.
The firm said that the initial results have indicated that about 80 metres of cumulative potential pay interval has been intersected across 15 potential pay zones.
Managing Director Paul Atherley explained: "This is about the best outcome we could have hoped for with the first two wells encountering over 135 metres of cumulative pay intervals within the targeted formations. The exploration programme to date has exceeded our initial expectations and as a result we now have multiple zones within these intervals to test for commercial gas flows.
"We continue to see significant potential in the Zijinshan Project, which underpins the expanded exploration and appraisal programme for 2013.
"With a healthy cash balance and an excellent technical team with a growing track record in the region, we are well placed to unlock value from this emerging opportunity, located in the heart of China, one of the fastest growing markets for gas in the world."
The company has installed a production casing string which it said will provide multiple opportunities to conduct flow tests on selected potential pay zones.
In consultation with the production sharing contract partner, PetroChina, one of China's major oil and gas companies, and the company's technical advisor, RISC, analysis of the side wall core samples and other information will be used to select which of the zones in each of the wells will be frack tested and if warranted, flow tested.
The purpose of these tests, which are expected to commence in mid-March and continue until late April (Paris: FR0004037125 - news) or early May, is to determine whether commercial flow rates can be established from one or more potential pay zones in each well, the firm explained.
The share price rose 6.67% to 14p by 08:59.