FTSE 250-listed Heritage said yesterday it will continue drilling at the Miran site, which is one of the largest gas fields to be discovered in Iraq.
Its shares sank 29 per cent to 310p, as investors had anticipated a lucrative oil find at the field in the Kurdistan region of the country.
Heritage expects first production in 2015, with an expected output rate of over 100m cubic feet per day.
“We are considering various development options including a tie-in to planned infrastructure,” said chief executive Tony Buckingham. “This discovery has the potential to generate substantial further value for our shareholders and benefit the people of Kurdistan and Iraq.”
The firm said it is mulling using the under-construction Nabucco pipeline to transport its gas output to Europe.