Leyshon Resources Limited provides the following update from its Zijinshan Gas Project, located on the eastern fringe of the prolific Ordos Gas Basin in Central China.
Its wholly owned subsidiary Pacific Asia Petroleum Limited (PAPL) has commenced drilling well ZJS7 at a location approximately three kilometres to the northeast of well ZJS5, in the central part of the 380 square kilometre central depression area.
Torrential rain has delayed the mobilization of the rig for over two weeks. The storms have resulted in the deaths of four people, affected 840,000 others, of which 28,000 have been evacuated. The Ministry of Civil Affairs has dispatched relief teams to the most affected areas of Shanxi Province.
Now that the rig has been mobilized the extreme weather conditions are not expected to have any further significant impact on the drilling operations which are expected to take approximately 4-5 weeks.
The well has a design depth of 2,300 metres and is targeting the same potential pay zones as those intersected in well ZJS5.
The recently completed formation pressure test in well ZJS5, after a three week shut-in period, recorded 16.5MPa/2425psi on a single zone, significantly higher than that recorded in nearby wells in the same strata.
Well ZJS7 is the first of three wells to be drilled as part of this year's accelerated exploration and appraisal programme. A further three wells are planned to be drilled based on favourable results from both drilling and testing, and on partner approval. All wells are expected to be flow tested in the event they intersect zones that warrant testing.
It should be noted that the programme remains at an early stage in the exploration and appraisal phase of de-risking the project and accordingly each well will be fully evaluated before proceeding with the subsequent well.
Managing Director Paul Atherley commented:
"Well ZJS7 is the third well in the overall eight well programme and has been located based on the interpretation of the recently acquired 318 kilometres seismic data and the results from well ZJS5.
The focus remains on the outcome at the end of the exploration and appraisal programme with a view to generating a resource by the end of the calendar year."
The Company is well placed to carry out its 2013 exploration and appraisal programme with a cash position of US$40 million (unaudited). The majority of the cash is held in US dollars. With 249 million ordinary shares on issue this represents approximately A$17 cents per share and 10 pence per share. The cash position does not take into account interest due nor all of the liabilities for the first two wells.
For more information about related Opportunities and Key Players visit
Coalbed Methane (CBM)
