UK explorer Rockhopper Exploration has failed to find oil in the Ernest prospect off the northern Falkland Islands, its second exploration well in waters off the disputed South Atlantic archipelago.
The well in Rockhopper's 100%-held PL024 license reached a depth of 2,240 metres but found no hydrocarbons and will be plugged as a dry hole, the company said Wednesday.
The well was drilled some 120km from its landmark Sea Lion oil discovery made in May, in a previously undrilled part of the North Falkland Basin.
"The result of Ernest is disappointing, but the well was always designed to investigate an entirely different geological play type from Sea Lion, to which our focus now turns," Rockhopper's managing director Sam Moody said in a statement.
Rockhopper's shares, which have jumped more than eightfold in value since the Sea Lion discovery was announced on May 6, fell by up to 11% in London after the announcement and were trading 2.9% lower at 296 pence by 10:50 GMT.
Ernest was the fourth slot in a controversial six-well drilling campaign which began off the Falkland Islands in February, marking the first exploration on the remote islands in 12 years.
Rockhopper was targeting recoverable resources of 130 million barrels in the prospect and had estimated a 23% chance of drilling success, the same pre-drill probability as the Sea Lion discovery.
TO TEST SEA LION FIND
After logging and plugging the Ernest well, the company said it planned to re-enter the Sea Lion discovery to flow test the find and gather data required for an appraisal program on the field.
The tests would also give an early indication of the production potential of the reservoir sands, Rockhopper said.
The discovery, which Rockhopper believes holds recoverable resources of 242 million barrels, is the first significant oil find off Britain's Falkland Islands, whose sovereignty is disputed by Argentina.
Rockhopper, a pure exploration play, said it was currently fully funded to plug the Ernest well and flow test the Sea Lion find, which it hopes will help it move the discovery towards being declared commercial.
The company said it held cash and credit lines totaling $119.7 million at the end of June, sufficient to also pay for its 15% contribution to two further exploration wells in the North Falklands Basin operated by the UK's Desire Petroleum.
Desire has said it plans to resume drilling off the Falklands Islands in the third quarter after further studying well data from its first disappointing Liz exploration well.
The drilling plans, which have supported the share value of the exploration minnows for years, has captured the attention of the British media due to protests by Argentina which claims sovereignty over the islands it calls Islas Malvinas.
Argentina invaded the islands in 1982 but was defeated by a British task force after a two-month war.
The well in Rockhopper's 100%-held PL024 license reached a depth of 2,240 metres but found no hydrocarbons and will be plugged as a dry hole, the company said Wednesday.
The well was drilled some 120km from its landmark Sea Lion oil discovery made in May, in a previously undrilled part of the North Falkland Basin.
"The result of Ernest is disappointing, but the well was always designed to investigate an entirely different geological play type from Sea Lion, to which our focus now turns," Rockhopper's managing director Sam Moody said in a statement.
Rockhopper's shares, which have jumped more than eightfold in value since the Sea Lion discovery was announced on May 6, fell by up to 11% in London after the announcement and were trading 2.9% lower at 296 pence by 10:50 GMT.
Ernest was the fourth slot in a controversial six-well drilling campaign which began off the Falkland Islands in February, marking the first exploration on the remote islands in 12 years.
Rockhopper was targeting recoverable resources of 130 million barrels in the prospect and had estimated a 23% chance of drilling success, the same pre-drill probability as the Sea Lion discovery.
TO TEST SEA LION FIND
After logging and plugging the Ernest well, the company said it planned to re-enter the Sea Lion discovery to flow test the find and gather data required for an appraisal program on the field.
The tests would also give an early indication of the production potential of the reservoir sands, Rockhopper said.
The discovery, which Rockhopper believes holds recoverable resources of 242 million barrels, is the first significant oil find off Britain's Falkland Islands, whose sovereignty is disputed by Argentina.
Rockhopper, a pure exploration play, said it was currently fully funded to plug the Ernest well and flow test the Sea Lion find, which it hopes will help it move the discovery towards being declared commercial.
The company said it held cash and credit lines totaling $119.7 million at the end of June, sufficient to also pay for its 15% contribution to two further exploration wells in the North Falklands Basin operated by the UK's Desire Petroleum.
Desire has said it plans to resume drilling off the Falklands Islands in the third quarter after further studying well data from its first disappointing Liz exploration well.
The drilling plans, which have supported the share value of the exploration minnows for years, has captured the attention of the British media due to protests by Argentina which claims sovereignty over the islands it calls Islas Malvinas.
Argentina invaded the islands in 1982 but was defeated by a British task force after a two-month war.
