Third Chinese oil well producing for Nido

PERTH-based junior Nido Petroleum Limited has brought its third oil well into production on the Zhongyuan redevelopment project in China.

In a report to the ASX, Nido managing director Peter Henderson said the well, Hu 12-155, had encountered a number of oil bearing sands, with extra formations of oil found in five levels.

“Of particular importance was an unexpected five metre thick channel sand found in the S3M9 reservoir that appears to have high oil saturation and very good porosity,” he said.

The well is currently producing from the lowest reservoir, before the higher quality upper reservoirs are tapped.

Production from the first well drilled in the area continues to improve with the production rate increasing by about 60 per cent and the water cut continuing to fall.

l The writer holds shares in Nido.