ITHACA Energy has seen its share price rise after it delivered a positive update on its third development well in the Stella field of the Central North Sea.
Aberdeen-headquartered Ithaca told the City it had successfully drilled to 16,185 feet below the sea within the field, with the well encountering what it termed high quality sands.
The oil and gas company said operations are now ongoing to run the well completion assembly, after which it will carry out a clean-up flow test
Ithaca said it then expects the results of the flow test to be announced at the end of the month. Chief executive officer Les Thomas said: "We are very pleased with the high quality reservoir sands encountered by the Stella B1 well and look forward to the flow tests when we finish well completion operations."
More broadly Ithaca, which has assets in the UK and Norwegian sectors of the North Sea, said its production enhancements programme is progressing as planned.
It noted its guidance for the year remains unchanged at 11,000 to 13,000 barrels of oil equivalent per day.
Ithaca confirmed that the drilling rig for the Athena "P4" well remains on schedule to arrive at the field in late August, once it completes work for existing clients.
Noting that Parkmead holds a 30 per cent stake in the Athena field, broker Charles Stanley Securities highlighted its optimism over the prospects for the well as it reiterated its recommendation to buy shares in Ithaca.
Its share price target is set at 380p.
The broker said: "We are excited that the balance of risk favours outperformance relative to the assumptions in our target price."
Shares in Ithaca, whose near 55 per cent stake in the Greater Stella Area covers the Stella and Harrier fields, closed up 4.75p at 144.75p.