Shares in oil discovery firm Desire Petroleum plunged almost 30 per cent this morning after the firm admitted it had found no oil or gas at its first well of a four-well drill.
Malvern-based Desire (DES), one of the British companies hunting for oil in the Falkland Islands, said a well it has named Rachel well in the North Falkland basin will be side-tracked after it identified potential sandstones in a different location, suggesting hydrocarbons may have migrated away from the source.
The news hit the value of its stock hard – falling to 81.5p at 10am today (October 15), compared to 155.5p as little as a week ago.
That means the share price is at its lowest level since June, when fellow explorer Rockhopper (RKH) upped the oil reserve estimates for its own discovery in the North Falkland basin.
Desire said, in a statement: “The well will be sidetracked to this location to evaluate the prospectivity. The sidetrack will commence when the present logging operations are complete.”
Alan Sinclair, of stockbroker Seymour Pierce, said: “Whilst the initial results of the Rachel appear disappointing, the potential in the down dip location is encouraging.”