EnCore Oil PLC

Comment from the FT Oil sector watcher:
"After a 5% increase in the shares yesterday, an announcement from EO today that the second appraisal well on the Cladhan oil discovery in the North Sea has been successful (EO = 16.6% interest). The deviated well encountered oil bearing sands in two Jurassic intervals, the Upper zone had a gross column of 18 feet and a net of 13 feet and the Lower reservoir had a gross column of 256 feet and net of 21 feet. Whilst this net to gross is quite small (the appraisal well last August had a net to gross of 102 ft/159 ft), the well is believed to be in communication with the original Cladhan discovery. Moreover the group now believes that it has a minimum hydrocarbon column of 1200 feet. No oil/water contact has yet been found, although the rig will now drill a sidetack significantly downdip in an attempt to establish this should take around 20-25 days. Whilst no further reserves update has been provided, this looks like positive news. EO currently carries total contingent/prospective oil in place resources of 256m barrels on a P50 basis and 466m barrels on a P10 basis. Assuming 40% recovery, this could lead to recoverable reserves of 102m-186m barrels, or 17m-31m barrels net to EO. Whilst there is still a lot of work to do to understand what is clearly quite a complicated structure, this nevertheless looks good news. Along with its 15% stake in the Catcher/Varadero discoveries (15m-20m barrels net EO), Id say there is still material upside in the share price and Id be a buyer."

For immediate release: 5 May 2011



EnCore Oil plc ('EnCore' or 'the Company')





Cladhan Appraisal Update


EnCore Oil plc (LSE: EO.) announces that the Cladhan appraisal well 210/30a-4z located in UK North Sea Block 210/30a has reached Total Measured Depth of 15,900 feet (12,312 feet Total Vertical Depth Sub Sea).



The appraisal well was drilled as a side-track to evaluate the Upper Jurassic sands, approximately 1,000 feet deeper than the 210/30a-4 well. The side-track encountered two separate reservoir intervals with a gross True Vertical Thickness of 12 feet and 169 feet. Although hydrocarbon shows were encountered in both reservoirs, the sandstones have an average porosity of less than 10% and it has not been possible to confirm if the sands are hydrocarbon bearing and in pressure communication with the original Cladhan discovery.

Upon completion of operations at well 210/30a-4z, the Transocean Prospect semi-submersible rig will commence a second side-track well, 210/30a-4y which will drill into the shallower, Central channel to the South. It is expected that this side-track will take approximately 25 to 30 days subject to weather or operational delays.

Commenting on the latest well result, Alan Booth, EnCore's Chief Executive Officer said:

"The principal aim of this aggressive down-dip step out well, some 2,500 feet down-dip from the currently mapped crest of the structure, was to try and obtain three key pieces of information; the location of the oil water contact, either directly or indirectly; an understanding of the nature of any reservoir development in the down-dip 'fan' area of Cladhan; and to better understand if the low net to gross pay in the previous well was related to the specific depositional environment at that location, or if there was also some porosity reduction due to depth.



"I think we can now answer the second two points. There does appear to be an element of porosity degradation related to depth as well as the nature of the depositional environment. The fan area does appear to contain well developed reservoir sequences. However these would appear to have been affected by the depth of burial and at this location, do not constitute effective reservoir.



"The answer to the first point, the oil water contact, is more problematic as no pressure measurements or fluid samples could be obtained from the reservoir. However, oil shows were reported whilst drilling throughout the sequence which suggests there may be oil contained within the tight reservoir. If this is the case, it might suggest that the limit to producible hydrocarbons is potentially related to porosity reduction and that there is in effect no oil water contact. This is a situation that has previously been encountered in this part on the North Sea.



"We now expect to drill two more side-tracks from this well location, one to test the central channel to the south of, and up dip of, the previous well, and then a second side-track location somewhere close to the current rig location. Both these wells will add significantly to our understanding of hydrocarbon distribution in the Cladhan field".

Big fall today how do we interpret their RNS, presumably the market reaction is not good news.

nor the impact on my holding!

oh dear - side tracking again - seen some bad results elsewhere with that - lets hope not repeated here - i think you can guess who i mean by elsewhere!

still think the drop over done and a bounce tomorrow though

Hey guys take it on the chin these things happen especialy with oilers!!!!!!!....

exactly so, but one doesn't have to enjoy it :-))

Not in but this seems to be overdone...could be that EO. are unlucky to spring this news on a bad market day so they seem to have taken the blunt of a sharp sp markdown...

EO. has almost halve from its peak.

This lot must be taking lessons from DES


WATER............. :) LOL

oh dear - as my 453 i am not a fan of side tracking at all - this definitely limits potential here - we want oil not information - des & others have loads of information but nowt else - still i suppose still have the northern track - glad i concentrated on xel = others instead - sorry to anyone holding and caught out here - dont make eo worthless still good company just reduced potential at this time

wouldn't want to be out of these.....;))

lol!!!

still it is bouncing right now!!

bought a few for a little bit of fun

stuck in at 125p :((

oh no! that not good sorry to hear that - i dont think will bounce that far today!! be nice for all if it did though - currently loads of stop losses being taken out - i am going to review my notes for a realistic potential here - we must not forget what eo already have - this is not a disaster of des proportions and it is not off the falklands thankfully!! i hope you get the 125 back soon - who knows what is round the corner - hoping for a 70+ finish here and see no reason why not if people take their fingers off the panic button and realise what eo already have - this is a fairly minor set back in the bigger scheme here imo

another fucking pasting ..... at least i didn't have too many of these and have now dumped them

ok this really is a definite buy imo from these levels - now very good price to buy in at imo - watch this rebound - if i was stuck in i would avg down - gla

added to my punt today

Reported to abuse for` dumping` on the bb