Desire Petroleum lost more than a quarter of its share value yesterday after the company revealed it was abandoning another dry well in the Falklands.
The company drilled 1,697 metres into pre-rift sediments at the Dawn/Jacinta prospect before concluding there was no oil and preparing to plug the well.
The small-cap explorer has been subject to wild stock price gyrations in recent months, as investor hype about the potential for major oil finds in the largely unexplored sea around the Falkland Islands – stoked by an early find by rival Rockhopper in May – sent the shares soaring, only to crash back to earth when a series of wells found nothing.
As recently as October, Desire shares were trading at 168.5p, but early last month, the group slumped by 50 per cent after tests on the Rachel North well which struck oil the previous week revealed the "mobile fluid" found was water rather than black gold. And the latest disappointment, at the Dawn well, left the stock down by 26 per cent at 35.25p last night.
Desire has plans for at least one more well in its drilling campaign, although the location is yet to be finalised.
Although the US Geological Survey has estimated that the area around the Falklands hold up to four billion barrels of oil, the only discovery so far is Rockhopper's strike at the Sea Lion prospect.
Just the suggestion of oil in the region has rekindled tension between Britain and Argentina over ownership of the islands.Reuse content