Trapoil shares drop after relinquishing licences

Trapoil shares fell 12.32 per cent to 15.12p Wednesday after the company said it had to relinquish some licences due to the current industry environment.

The group said it had renounced licences including Inverewe, Lytham and Sienna as it had been unable to move them forward enough.

In an operational update on the Romeo discovery in the North Sea, the company also said further work was necessary to appraise its potential.

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Trap - which has a 12.5% stake in the well, drilled jointly with Total - confirmed they had found oil and satisfied the obligations of the licence.

The Romeo well reached its target depth and encountered oil at three different levels within the Jurassic and Triassic comprising in aggregate some 200ft of gross oil pay.

A wire-line test was planned but was cancelled due to poor hole conditions. Following various further delays due to adverse weather conditions the well is now being plugged and abandoned.

Chief executive Mark Groves Gidney said: "I am delighted that the Romeo well has successfully discovered oil as it was one of our 'home grown' prospects for which we earned a fully carried interest.

"We have now discovered oil in both wells drilled to date and look forward to the next well in our ongoing 2013 programme.

"It is unfortunate that at the same time we have had to relinquish some promising licence interests, which is symptomatic of the prevailing difficult economic and industry environment; however, the group remains well placed to progress the remainder of its asset portfolio and secure additional opportunities."

RD