Gas-focused E&P Sound Energy (SOU:AIM) is up 3.2% to 61.7p, giving up earlier gains of more than 12%, as it reports extremely encouraging results from a well on its Tendrara block in Morocco.
The modest rise on the announcement of a significant find probably reflects some profit taking after a very strong run.
The company drilled the TE-6 well in partnership with Schlumberger (SLB:NYSE). The flow rate of 17 million cubic feet per day (mmcfpd) is several multiples of the volume suggested by pre-drill estimates.
The news bodes well for the company’s extended collaboration with the oil services giant which will now take in a potentially transformational well in Italy on the Badile prospect.
Brokers are excited by the news. FinnCap reiterates its ‘buy’ recommendation and ups its price target from 32p to 104p while Cantor Fitzgerald also stays at ‘buy’ and ups its own target from 40p to 101p.
Cantor analyst Sam Wahab says: ‘With a flow rate of 17.0MMcf/d achieved, beating pre-drill estimations by seven times, we believe the company may have established a material hydrocarbon province on a global scale.’
