Official: Seep Found Near BP Well

Updated from 5:26 p.m. EDT

Update includes statement from a federal official that a seep has been found near BP's broken oil well.

NEW ORLEANS ( TheStreet) -- A federal official said a seep and possible methane have been seen near BP's ( BP) broken oil well in the Gulf of Mexico, according to an Associated Press report.

Both are possible indications that the well has sprung a new leak or leaks following three days of testing of a new cap that has prevented any new oil from spewing into the Gulf of Mexico.

The official, who spoke on the condition of anonymity, said the energy company is not complying with the federal government's demand for more monitoring, the AP report said.

A BP representative declined to comment on the official's allegation but said "we continue to work very closely with all government scientists on this," the report said.

Although a three-day testing period for the cap ended Sunday afternoon, officials were mum on what would happen next, the Associated Press reported earlier Sunday.

Meanwhile, a contradiction appeared to emerge between the company's and government's plans.

"Right now we don't have a target to return the well to flow," Doug Suttles, BP PLC's chief operating officer, was quoted saying by the AP Sunday.

But on Saturday the government had said that oil would be allowed to flow freely again into the sea for a few days following the test until the new cap could be connected to oil-collection ships on the surface of the Gulf, the AP noted.

The government's plan stemmed from worries that keeping the well capped would create pressure that could cause the well to spring a leak somewhere else.

Retired Coast Guard Adm. Thad Allen, who will have the final say, said earlier Sunday the government's plan hadn't changed and that BP executives were on the same page with him, the AP reported.

The testing of the new cap was originally expected to last 48 hours, but BP and the government Saturday agreed to extend it by another 24 hours.

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Allen said scientists needed to do more work to understand why the pressure measured at the well cap was lower than expected, the AP reported. He said there were two possible explanations. In the first, there's less oil in the reservoir, because so much has already leaked out into the Gulf. In the second, more grim, scenario, oil is leaking out underground.

Shares of BP ended Friday at $37.10

This article was written by a staff member of TheStreet.

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