LANDS oil explorer Rockhopper said the latest well in its controversial drilling campaign in the south Atlantic islands has come up dry.
However, the firm’s shares closed over 12 per cent higher as the drilling at the Sea Lion field suggested oil reserves 20 per cent bigger than first thought, with a mid-case estimate of 1.3bn barrels.
The British company said the 14/10-8 well, designed to look for further oil at its Sea Lion complex, as well as at its Casper and Kermit prospects, found 123 metres of oil but the sands were also water-logged.
“The thickness of the reservoir encountered in the well has increased the company’s confidence that good quality reservoir is likely to be present in other relatively low amplitude areas within the Sea Lion main complex,” Rockhopper said yesterday.
The well will be plugged and abandoned, the firm said.
“Whilst the 14/10-8 result is disappointing, the increase in the in-place resource in the main structure is positive for the commercial development of the field,” said analysts at Evolution Securities.
Rockhopper is trying to raise funds to support a $2bn project in the area but will need to prove there is sufficient viable oil to justify the investment.
The company’s situation is further complicated by geo-political tensions over sovereignty of the Falklands.