Chariot Oil and Gas well a dud

Chariot Oil and Gas, an Africa-focused exploration company, has reported that initial logging results at the Kabeljou exploration well in the Orange basin offshore Namibia indicate that no commercial hydrocarbons were found, meaning the well will be plugged and abandoned.

The well intersected the Nimrod delta as planned, although the reservoir was less developed than anticipated at this location, the firm said. It conducted a comprehensive evaluation programme to improve its understanding of the area and is now planning to carry out detailed analysis on the data collected. A resource update of the remaining prospectivity in the block will be provided once this evaluation has been completed.

Paul Welch, Chief Executive Officer of Chariot, said: "Whilst the results from Kabeljou are disappointing, the fact that we encountered source rock within this well is important. The Nimrod prospect was our largest target in the south, but there are still other areas of interest in this licence and these well results may provide us with the ability to identify additional prospectivity in other horizons. Information of this detail is invaluable when working in frontier environments so this well will have a significant impact on our future exploration programme.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues 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

Sign up

"We will be discussing these findings and the next steps with our partners Petrobras and BP and will update the market with plans in due course.

"Our overriding strategy remains the same - this is the second well of a larger four to five well programme in Namibia and we will continue to move forward with our work in the Central and Northern blocks. Our efforts in Mauritania continue to progress as do our plans to add new assets to our portfolio."

The share price dropped 23% in early trading.

NR