Tethys Petroleum (TSE:TPL)(LON:TPL) saw its shares rally early Monday after it announced the initial results of its Persea 1 exploration well in Tajikstan, and its plans to carry out production testing on the well in the new year.
The Persea 1 well, drilled some five kilometres from the town of Kurgan Teppa, reached a total depth of 2,655 metres.
Wireline logs showed a 50 metre gross zone of possible hydrocarbons, which occur in crude oil, within a mixed sandstone and carbonate sequence assigned to the Alai formation - similar to the formation about to be tested in the East Olimtoi well (EOL09), the company said.
Because of hole stability issues, Tethys said the section was drilled with relatively high mudweights, which tends to mask hydrocarbon shows while drilling.
The company now plans to run 7-inch liner in preparation for a production test, with the aim of establishing commercial flow of hydrocarbons from this zone.
The actual testing will be carried out in the first half of 2012, with the cost to be financed by internally-generated cash flow, the company said.
The news comes following Tethys' recent announcement that it acquired an additional interest in the Bokhtar production sharing contract, which includes the Persea prospect. The company now holds an 85 percent working interest in Persea.
Tethys is an oil and gas exploration and production company with activities in Central Asia, focused on the Republics of Kazakhstan, Tajikistan and Uzbekistan.
Shares of the company moved more than 4.3 percent higher in early trading on Monday, to 48 cents as of 9:39am ET.