Premier Oil said it was giving up on its 70 per cent-owned Cyclone well in the North Sea after it failed to strike oil.
The firm said that after drilling 6,076ft it hit 105ft of Palaeocene Cromarty sands but the well logs identified only residual oil.
"This suggests that the trap, which was identified as the critical risk factor pre-drill, leaked," Premier said.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
In 2012, Premier drilled five exploration wells targeting tertiary sands in the UK Central North Sea.
This resulted in the success at Carnaby, within the greater Catcher Area, and the company said its tertiary prospect drilling in the UK would now concentrate on this area.
It plans to spud the Bonneville well in March 2013, while a higher impact exploration programme in the North Sea focusing on deeper Mesozoic plays will see drilling begin at its Luno II and Lacewing prospects in the first quarter of 2013.
