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Shares of AIM-quoted Prospex Energy (LON: PXEN) have plunged Friday after its El Romeral well intervention project in southern Spain was unsuccessful.
“Unfortunately the measurements in well Rio Corbones-1 demonstrated that the planned restoration of the gas production was not possible,” stated Prospex.
“After several slickline runs to remove the water from the tubing it quickly became clear that no gas was evident coming from the well, only further influx of water from the reservoir,” they added.
Without gas, the company said there was no possibility of creating a foam to lift the water, so the well intervention programme was reduced after acquiring downhole pressure and temperature data.
Mark Routh, Prospex's CEO, commented: “It is disappointing that the well intervention at Rio Corbones-1 has not resulted in re-establishing gas production from the well. However the static and dynamic pressure data collected from the producing wells will be used to determine remaining reserves and to optimise the infill well drilling campaign planned when permitting is in place in 2H 2022.”
Prospex's budget for the well intervention work was €103,000, covering €79,000 for the well intervention and €24,000 for data acquisition. Therefore, the final expenditure for the overall programme is estimated to be less than €80,000.
In addition, the company's planned plant optimisation programme has been delayed by equipment supply chain issues.
“It is frustrating that the supply of equipment has delayed the plant optimisation programme, but this will be underway as soon as the necessary parts arrive on site next week,” added Routh.
Prospex told investors at the start of October that the system optimisation project is expected to boost income from power generation by up to 65% through 24-hour operations.
Prospex Energy shares are down over 11.4% at 2.7p after falling to a low of 2.12p earlier in the session.
Prospex Energy shares are traded on the London stock exchange's AIM market (the alternative investment market), which is the submarket specifically for smaller companies. AIM stocks are attractive to investors as they have tax advantages and smaller companies have the potential to benefit from rapid growth. But are PXEN shares the best buy? Our stock market analysts regularly review the market and share their picks for high growth companies
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