London headquartered international oil and gas exploration, development and production company Leni Gas & Oil (LON:LGO) has begun drilling and spudded the hole for the Hontomin extended well test in northern onshore Spain.
The objective of the Hontomin programme is to appraise the long term production potential of the Hontomin-2 well. The programme is expected to take 4 weeks to drill-out and re-complete prior to monitoring production performance
Electric wireline logging and perforation of the existing hydrocarbon intervals and other potential undepleted zones is scheduled for September/October to assess the full production potential of the structure.
The Hontomin prospect is a proven Lower Jurassic Lias Calcarenite hydrocarbon formation discovered by Chevron (NYSE:CVX) in the 1960s and initially tested at an initial rate of 700 bopd (barrels of oil per day).
LGO targets growth through the acquisition and enhancement of proven reserves and producing assets in low risk countries. The company has a broad range of projects in its portfolio, with assets in the US Gulf of Mexico, Spain, Trinidad, Hungary and Malta.
Edison Investment Research has estimated that LGO’s Spanish assets along with its interests in the Gulf of Mexico (GoM) and Trinidad, can attribute recoverable resources of 40 mmboe (million barrels of oil equivalent). If the deep-plays on the three projects and the Malta assets are included, LGO may have over 575 mmboe in unrisked resources.
Back in July, the equity research specialist stated that LGO had the potential to transform itself into a mid-tier exploration and production (E&P) company over the next two or three years.