Stone Energy Corporation (NYSE:SGY) announced an operational update on its Amethyst well.
As previously reported, production from Stone’s Amethyst well (the “Well”) was shut in during late April 2016 to allow for a technical evaluation. During the first week of November, we initiated acid stimulation work and intermittently flowed the Well during the month of November at a rate of 10 – 15 million cubic feet of gas per day, while observing and evaluating the Well’s performance. On November 30, 2016, we performed a routine shut in of the Well to record pressures and determined that pressure communication exists between the production tubing and production casing strings, resulting from a suspected tubing leak.
We are currently diagnosing the pressure information in an attempt to determine the most likely failure points and expect to have a better understanding within one to two weeks. We have communicated our findings to date with the Bureau of Safety and Environmental Enforcement (“BSEE”) and will be working with BSEE in determining our next steps. We will evaluate our options to restore production from the Well, and all potential impacts on our estimated proved oil and gas reserves, which we anticipate will continue for at least several months. The estimated proved reserves associated with the Amethyst well at year-end 2015 were approximately 79 billion cubic feet of gas equivalent. We can provide no assurance that we will be able to restore the Well’s production to previous levels, or at all. We also cannot ensure that a replacement or sidetrack well would be economic, or that we would have sufficient liquidity if significant capital is needed to restore the Well’s production. (Original Source)
Shares of Stone Energy are falling nearly 7% to $7.07 in Tuesday’s trading session. SGY has a 1-year high of $55.90 and a 1-year low of $2.70. The stock’s 50-day moving average is $9.39 and its 200-day moving average is $10.70.
Stone Energy Corp. engages in the acquisition, exploration, exploitation, development, and operation of oil and gas properties. Its operates in the Gulf of Mexico Basin. The company was founded by James Hiram Stone in 1993 and is headquartered in Lafayette, LA.