(MENAFN - ProactiveInvestors - Australia) Leyshon Resources (ASX: LRL, AIM: LRL) has confirmed that stimulation will be required to produce oil flows from a coal seam gas well in the Zijinshan production sharing contract, China.
Local practice is not to conduct fracture stimulation during the coldest part of the winter months and the opportunity was taken to carry out flow testing on two previously identified potential pay zones totalling 25 metres in the ZJS5 well.
However, neither of these zones recorded sufficient gas flows and fraccing will proceed as originally planned.
Leyshon is also drilling the ZJS6 well close to the southern boundary of the 708 square kilometre Zijinshan PSC.
ZJS5 and ZJS6 are part of a three well program designed to test for gas in formations in an unexplored 380 square kilometre central depression area that appear to show good continuity with the neighbouring Sanjiaobei discovery operated by fellow Australian Sino Gas & Energy (ASX: SEH).
All three wells are located within about 10 kilometres of a tie-in point on the recently commissioned Lin-Lin pipeline which supplies the growing demand in Shanxi Province, where wellhead contracts have recently been struck in the US6-7.5 per thousand cubic feet of gas range.