BORDERS & SOUTHERN Petroleum said yesterday its latest well drilled in the Falkland Islands as part of a controversial exploration drive did not find oil or gas, pushing its shares down 71 per cent.
Borders & Southern, which is leading efforts to find oil off the south coast, chalked up an initial success April, when it found gas condensate, a liquid which often trades at a premium to crude oil, at its first well.
Analysts said investors should not give up on the southern area.
“This is clearly a disappointing result, but one that we believe does not completely write-off the southern Falkland basin,” Numis analyst Sanjeev Bahl said.
“The fact is that they have found hydrocarbons in both wells. In the worst case, it’s going to be a very gassy basin, but if we’re looking at multi-trillion cubic feet discoveries in terms of volumes, it’s still very commercial.”
Borders has said it expects the results of tests in August on the discovery it made at its Darwin well.
The firm’s fortunes contrast with those of Rockhopper, which struck oil in the Sea Lion field in the remote Falklands, home to 3,000 inhabitants. The explorations have inflamed tensions between Britain and Argentina, which claims sovereignty over the islands.
A $1bn deal between Rockhopper and Premier Oil for development of oil found north of the Falkland Islands in 2010 was announced last week. Companies looking for oil in the Falklands have ignored legal threats from Argentina.
City A.M. Reporter