Shares in Leyshon Resources (LRL) dived 30 per cent after the company released negative flow test results from its second unconventional gas well in China. Leyshon tested several potential payzones at the ZJS6 well – which was drilled to test the southern boundary of a tight gas formation – but they were all found to be water-bearing. The company says it doesn't know if this is a well-specific issue or if the payzone from the central area is simply waterlogged in the southern area. Leyshon has decided to abandon the well for now and focus on the central and northern areas of the licence instead.
The bad news comes close on the heels of much more positive flow test results from the company's first well, ZJS5 – drilled nearer the centre of the formation – which yielded potentially commercial gas flows of around 160,000 cubic feet per day (approximately 29 boepd) over an eight-hour testing period (which, it should be noted, is a very short and unreliable test period). This rate came from just one payzone, so a higher flow rate could be possible from testing alternative payzones later on. Leyshon says its internally estimated cut-off for a commercial flow rate is about 125,000 cubic feet per day.
The company plans to drill a third well in July about three kilometres to the north of ZJS5.
