ECONOMY

Kavala Oil seeks credit following encouraging find

A group of UK bankers visited the northern city of Kavala in the last few days in connection with proposals for funding support to oil-exploration schemes in the area. The visit took place at the initiative of London Stock Exchange-listed Regal Petroleum Plc, which holds a 57.69 percent interest in Kavala Oil, a company drilling for oil in the Kallirachi field in the Gulf of Kavala. The Regal group said in a statement on Friday that Kavala Oil had successfully completed drilling of an exploration well to a depth of 2,556 meters in Kallirachi and that the presence of hydrocarbons had been detected. «Initial logging of the well indicates a 200-meter gross pay zone with a 61-meter sweet oil net pay zone,» said the statement. Additional technical interpretation and analysis has commenced in order to quantify and confirm the deliverability of the reservoir, it added. The cost of drilling was within budget and was funded from the credit facility provided by Regal to Kavala. Prior to the drilling of the exploration well, independent experts estimated that the field may contain up to 227 million barrels of recoverable oil. «The initial results of this exploration will confirm the confidence of the directors in the considerable potential of the Kallirachi field,» said Regal Petroleum. The group intends to continue exploration in the area and devote part of the credit facility it is seeking to tapping wells in the Prinos field off the nearby island of Thassos, which have remained idle for more than two decades. Tests on oil from E field off Nea Peramos showed a potential of at least 20 million barrels of recoverable oil. Regal hopes to confirm the viability of the scheme for the next 10 years. A local scheme, including oil industry workers, holds a 33.3 percent interest in Kavala Oil. Local press reports said last summer Regal had bought part of exploration rights in the sea area between Thassos and the Mount Athos peninsula. The news of the results of the Kallirachi drilling propelled Regal’s share price up 33 percent to a 180 pence in London on Friday, and its stock market value to 180 million pounds sterling.