Petro-Victory Energy (TSX: V.VRY, Stock Forum) celebrated good news at its Lapacho well located on the Pirity Block in Paraguay when the company announced that it’s operator of the operator, President Energy, had encountered hydrocarbons within the Devonian Icla Formation at a depth of 3,936 metres.
According to the news release, these heavily fractured sandstones revealed a porosity of 6% and a series of sidewall cores from the interval displayed good light oil or condensate shows.
The operator will continue to drill in order to test the primary target, a discrete, well-defined fault block trap, within the underlying Devonian Santa Rosa Formation.
Lapacho is expected to reach total depth in mid-November and President Energy has estimated a target of 200 million boe of gross mean unrisked resources in the deeper Santa Rosa formation.
The company and the operator plan to flow test the potential oil or condensate bearing sandstones in the Icla Formation as well as any hydrocarbon bearing sandstones encountered in the Santa Rosa.
Based on the results of the first two wells, an additional exploration well may be drilled and since the company will mobilize the rig back to the Jacaranda well, due to the Lapacho discovery, the Tapir exploration is likely to be postponed.
Canaccord Genuity maintained a SPECULATIVE BUY on the company due to its discovery and based on a 20%-10% discount, Canaccord estimated a probabilistic risked value range of $1.80 to $3.60 per share for the company.
Petro-Victory was in the news recently when the British Virgin Islands-based company announced spudding target #2 at Lapacho back at the beginning of September.
Shares climbed 68% on the news to 26 cents per share.
Currently there are 172.0m outstanding shares with a market cap of $30.1 million.