Borders & Southern (ISE: BOR.L) lost 70% of its value this morning after the Alternative Investment Market-listed oil minnow plugged and abandoned its exploratory well 170 km south of the Falkland Islands. Its shares fell from 62 pence at Friday's close to 19 pence in early trade this morning.
The company said:
Well 61/25-1 was drilled to a total measured depth of 3060m. The well penetrated the upper Tertiary target on prognosis but was unable to reach lower targets due to anomalous pressure conditions. The lower targets remain unevaluated. ...
It is very disappointing not to have reached all the potential reservoir targets in this well. The geological and engineering data will now be reviewed in detail in order to understand the complexities of this prospect.
The rig will now be assigned to Falkland Oil & Gas (ISE: FOGL.L) , which is drilling in nearby waters.
In a recent podcast with energy consultant Malcolm Graham-Wood, our guest explained that Border & Southern's disappointing results might have an impact on Falkland Oil & Gas discovering oil.
However, Wood added: "You can have one without the other. He said we saw that Rockhopper Exploration found oil when other people had been nearby and not found oil. So anything can happen!"
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