Falkland Oil fails to find commercial hydrocarbons at Humpback well

Shares in Falkland Oil & Gas fell sharply after the company said it failed to find any commercial hydrocarbons at its Humpback exploration well.

The company said the well encountered non-commercial quantities of oil and gas within a number of sandstone intervals.

In addition, it said that “for a number of operational reasons”, it was not possible to obtain fluid samples from any of the hydrocarbon bearing zones in the well.

The news came just a couple of weeks after the company said initial results revealed oil and gas shows.

Falkland will now evaluate the results in more detail and assess the impact on the prospectivity of the Diomedea fan complex and the rest of the southern licences.

It said the results do demonstrate a working hydrocarbon system and highlighted that Humpback was only one of a number of geological plays within the Fitzroy sub-basin.

The company said that importantly, the results will allow calibration of the 3D seismic data and this may facilitate the mapping of higher quality sands elsewhere within the large area covered by 3D seismic.

Chief executive officer Tim Bushell said: “While the Humpback well has provided mixed results, it should be noted that this is the first well in the South Falklands Basin to encounter oil and also demonstrate a working hydrocarbon system in the Fitzroy sub-basin.

“The reservoir quality in the various targets penetrated by the well was however poorer than pre-drill expectations, and further work will now be required to fully integrate the well results and assess the implications for the overall oil and gas potential of our southern licences.”

At 1013 GMT, shares in the company were down 32.5% at 13.68p.