Premier Oil has disappointed its investors with the announcement that the Spaniards East Well in Block 15/21, in which it has a 28 per cent operating interest has been plugged and abandoned as a dry hole.
Although the well encountered 75 feet of Jurassic sands, these were shown to be water wet on the logs.
Serica Energy, Parkmead (12.624%) and Faroe Petroleum (8.4%) also each have a stake in the well. Both Parkmead and Faroe have confirmed that they will not be required to make any cash contribution to the dry-hole cost of this well.
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
Graham Stewart, Chief Executive of Faroe Petroleum, commented: "Although the Spaniards East well carried a reasonably high level of risk, we agreed to participate, given the upside potential in the event of success, and the fact the well was drilled at no cost to Faroe Petroleum."
Tony Craven Walker, Chairman and Interim Chief Executive Officer added: "There was a reasonable pre-drill expectation that the Spaniards discovery extended over a wider area and, given its proximity to existing production facilities, could therefore be commercial.
"Whilst a full analysis of the well results will be required before a final conclusion can be reached, the initial interpretation now indicates that the accumulation is likely to be confined to a more limited area around the original discovery well."
-
How taking a two-year career break could leave a £26k hole in your pensionCareer breaks are increasingly common but it is important to take steps to protect your pension, as gaps compound over time
-
Cash in on your attic: Thousands could be sitting dormant in your storageSelling your valuables at auction could be far more lucrative than you think. We take a look at how auctions work, and some tips to help you maximise your profits
