Sweden's Lundin Petroleum AB (LUPE.SK) said Monday its Morskaya-1 exploration well in Russia's Lagansky block has tested at a flow rate of 2,500 barrels of oil a day.
The company carried out two drill tests, one flowing at 1,700 barrels a day and the other at 800 barrels a day, with higher rates expected during the development phase, it said. Tests for gas flow rates will be carried out when more appraisal wells are drilled, Lundin said.
The Lagansky block is located in the northern Caspian Sea. Russian company Lukoil Holdings (LKOH.RS) has made several oil and gas discoveries in the Russian sector of the Caspian Sea.
Two more wells are planned for 2009, the Petrovskaya-1 and an appraisal well of the latest Morskaya-1 discovery.
Analysts have said the high oil price could help offset some of the expected high costs of developing the prospect due to environmental considerations.
Lundin Petroleum holds a 70% stake in the Lagansky block, but Russian giant OAO Gazprom (GAZP.RS) has a call option to acquire a 50% plus one share holding in the block. Lundin meanwhile has a call option to acquire an additional 30% from minority shareholders, and if both companies' options are exercised it would have a 50% less one share stake, with Gazprom holding the remainder.
The independent oil and gas exploration and production company has assets in Europe, Africa, Russia and the Far East. It has proven and probable reserves of 184.2 million barrels of oil equivalent as of Jan. 1, 2008.