LON­DON-Bay­field En­er­gy Hold­ings PLC said yes­ter­day its EG7 well, off­shore Trinidad in the Ga­le­o­ta li­cense, has been plugged and aban­doned due to de­te­ri­o­rat­ing hole con­di­tions. The well had been side­tracked to a to­tal depth of 7,090 feet and had logged some thin hy­dro­car­bon bear­ing sand­stones at 5,500 feet. How­ev­er, due to de­te­ri­o­rat­ing hole con­di­tions, it was not pos­si­ble to run a sam­pling tool and the de­ci­sion was tak­en to plug and aban­don the well.

Re­sults of the well will be stud­ied and in­cor­po­rat­ed in­to the re-eval­u­a­tion of the EG1/EG7 struc­ture, Bay­field said. As re­port­ed on May 14, fol­low­ing the com­ple­tion of this well, the Go­ril­la III jack-up unit will re­turn in the third quar­ter of this year for the next planned two wells in its pro­gramme-EG9 and GAL25-which are both struc­tural­ly in­de­pen­dent of the EG7 well, the com­pa­ny said.

The Ga­le­o­ta Li­cense cov­ers 122 square kilo­me­tres in the shal­low wa­ters of the Colum­bus Basin off the south-east coast of Trinidad. The Ga­le­o­ta Block con­tains the Trintes Field, which was dis­cov­ered in 1963 and start­ed pro­duc­tion in 1972. In ad­di­tion, there are five oth­er dis­cov­er­ies, re­ferred to as East Ga­le­o­ta, which were drilled be­tween 1964 and 1985 but were not de­vel­oped be­cause they were con­sid­ered to be non-com­mer­cial at that time.

The group's eval­u­a­tion of the East Ga­le­o­ta dis­cov­er­ies demon­strates sig­nif­i­cant up­side po­ten­tial, it said. Mean­while, on Mon­day Stock­Mar­ketWire.com re­port that Bay­field En­er­gy's af­ter-tax loss­es rose to US$14.3 mil­lion in the year to the end of De­cem­ber - up from US$4.7 mil­lion for 2010 Rev­enues in­creased to US$22.0 mil­lion from US$$14.2 mil­lion while gross loss­es rose to US$2.8 mil­lion from US $2.1 mil­lion.

Chair­man Fin­ian O'Sul­li­van said: "2011 was a land­mark year for the group, with both the op­er­a­tional progress made in Trinidad & To­ba­go and the ad­mis­sion of the com­pa­ny's shares to trad­ing on AIM fol­low­ing an ini­tial pub­lic of­fer­ing in Ju­ly which raised US$87 mil­lion (be­fore ex­pens­es).

"Since the for­ma­tion of the group in 2008, it had al­ways been an ex­pec­ta­tion that cap­i­tal would be sought in pub­lic mar­kets pri­mar­i­ly to fund an ex­plo­ration and ap­praisal drilling pro­gramme in Trinidad. The tim­ing of the fund-rais­ing, co­in­ci­dent with the on­set of the eu­ro­zone cri­sis sur­round­ing Greek in­debt­ed­ness made the process some­what chal­leng­ing.

"The fact that the group was suc­cess­ful in rais­ing US$87m re­flect­ed mar­ket con­fi­dence in the strength of the man­age­ment team, the qual­i­ty of the port­fo­lio, and the team's abil­i­ty to re­alise val­ue from the un­der­ly­ing as­sets. "Whilst op­er­a­tional progress has been made, pro­duc­tion from the Trintes field has lagged ex­pec­ta­tions with con­se­quent ad­verse im­pact on op­er­at­ing cash flow and prof­itabil­i­ty.

"Is­sues aris­ing from de­lays in the mo­bil­i­sa­tion of the rig to Trinidad and in achiev­ing full op­er­a­tional per­for­mance re­sult­ed in de­lays to the de­vel­op­ment drilling pro­gramme of more than five months. We be­lieve the op­er­a­tional is­sues have now been over­come and we ex­pect to see con­tin­ued pro­duc­tion im­prove­ment through 2012." (Mar­ket­Watch)