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Pantheon Resources PLC said production testing operations at Alkaid 2 horizontal well have begun, and the well is in the clean-up phase.
Alkaid 2 showing "positive early indications of oil production from the reservoir" and is being shut in while it is transitioned to larger permanent facilities from temporary flow-back facilities.
Shares in the Alaska-focused oil and gas company fell 1.2% to 90.50 pence each in London on Tuesday morning.
Further, Pantheon will perform a "pressure build-up operation" by placing a pressure "bomb" in the production packer, which will allow an increase in formation pressure over several days. "This will allow for analysis of multiple reservoir parameters and is a standard reservoir engineering analytical tool," the company explained.
Alkaid's initial fluid flow has produced daily rates "in the thousands of barrels", Patheon noted.
"We have seen promising indications of reservoir performance, with oil cuts showing early in the flow back process. Often, the first real indications of oil occur much later. Whilst the production of frac sand is inconvenient, as is the waiting time for obtaining a coiled tubing unit, it is not an uncommon occurrence in multistage fracture stimulation completions in conventional reservoirs and will be dealt with once the unit arrives," said Chief Executive Officer Jay Cheatham.
The firm aims to complete its clean up programme at Alkaid in the coming weeks, and will announce the results of the flow testing "in due course".
"Whilst the early data is very encouraging, I reiterate my previous statements that we cannot make a definitive assessment of the ultimate commerciality of the well until flow testing operations have concluded. However, we remain optimistic," Cheatham added.
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