Sterling Energy said its wells in Kurdistan had produced less gas than expected, sending its shares on the Aim market down 39 per cent to 78.5p.
Its two Sangaw wells had initially produced 4m cubit feet of gas per day, but the supply quickly dwindled. The company had spent almost a year drilling to more than 2km but fresh tests showed mainly water in the underground reservoir.
Sterling’s chairman Alastair Beardsall said: “The initial recovery of gas flowing to surface from these zones within the Kometan and Shiranish is encouraging. However the subsequent water flow from these zones is disappointing. We shall now resume drilling to evaluate the Qamchuqa and then on to the Jurassic [areas].”
Oriel Securities analyst Nick Copeman downgraded the stock from “buy’ to ‘hold”.
“At this stage we see this well as high risk as the Cretaceous acts as one reservoir interval
in many of the discoveries in Kurdistan suggesting that the Cretaceous zones are likely to
be mainly water bearing and the Jurassic interval is less well proven.”
HaiKe Chemical Group shares tumbled 55 per cent to 19.25p, after the Aim-listed company said in its half-year results that pre-tax profit fell 93.9 per cent to $1.4m (£900,000).
The firm said a 79 per cent rise in revenues to $467m was not enough to offset falling prices and the cost of the expansion of its petrochemical business.
Max Petroleum shares fell more than 14.5 per cent to 11.75p after the oil explorer said it would abandon its exploration well in Kazakhstan. The KAW-1 well reached a depth of 1.9km but only found minor hydrocarbons. The company said it will move on to drill in other parts of the country.