Falkland Oil & Gas (LON:FOGL), the exploration group working on extensive licence areas to the south and east of the Falkland Islands, is set to plug and abandon its Toroa F61/5-1 well after failing to encounter hydrocarbons. The Toroa exploration well was drilled to a total depth of 2476 metres and logging operations have now been completed. FOGL said that further detailed evaluation of all data and information gained from the well would now be carried out.
Tim Bushell, the company’s chief executive, said: “Whilst the results of the Toroa well are disappointing, it has to be remembered that this is the first well in a previously undrilled frontier basin. We believe that these results have helped to reduce some of the key risks of the plays in the deepwater areas of our licences. In that respect the well is certainly encouraging for further exploration and we look forward to continuing our exploration programme once a suitable deepwater rig has been secured.”
FOGL began drilling the Toroa F61/5-1 exploration well in May and was expected to report back to the market last week before being hit by delays caused by minor operational issues and weather related downtime. Shares in the AIM listed company soared from 199p to 244p during the last week of June but had slipped back to 201.75p by the close last Friday.
The Toroa prospect is located in Licence PL15, in which FOGL has a 49% interest alongside BHP Billiton. The company is planning a two-phase drilling programme, starting at Toroa and then moving on to a deepwater campaign, which is currently expected to start in late 2010. Under the terms of its farm-in agreement, BHP Billiton is funding more than two thirds of the total cost of the committed two well programme.
FOGL is one of four listed groups operating in the Falklands, which include Rockhopper Exploration (LON:RKH), Desire Petroleum (LON:DES) and Borders & Southern Petroleum (LON:BOR) . It is using the Ocean Guardian drilling rig, which was initially contracted by Desire Petroleum last year and began work in the region in February. In May, Rockhopper became the first company to strike significant oil, with a discovery at its Sea Lion prospect in the North Falkland Basin.
Very disappointing - Rockhopper have been rather blessed, it seems.
