OIL explorer Desire Petroleum has failed to strike oil in the Falklands Islands, days after it said it believed it had, denting hopes that the territory will become a major new oil province.
The company said extra analysis of data from a key well in the British islands over which Argentina claims sovereignty did not support initial indications of an oil discovery, which saw the stock close 47 per cent down at 70.5p.
“This is a major blow to Desire,” broker Evolution said yesterday.
Desire said last Thursday it believed it had made the second oil find at its Rachel North well in the North Falkland basin, after rival Rockhopper made the first at its Sea Lion prospect in May, raising hopes of more finds.
Desire’s disappointing well at Rachel, however, is the latest setback to cool excitement sparked by the controversial Falklands exploration, to which Argentina objects.
Another blow came last Friday when it emerged that ExxonMobil had said there was inadequate oil in the islands to be profitable.
Desire’s share price more than doubled in one day in October without the group issuing any news.
“They were obviously under a lot of pressure from the stock market to announce something last week and they hadn’t finished acquiring the data ... in a normal course of events you wouldn’t put a press release out until you finished doing all the data acquisition,”said an analyst who declined to be named.
Desire said the Rachel North well would now be plugged and abandoned and the rig would be moved to drill its Dawn/Jacinta prospect.