Some people are never satisfied, or so managers of Heritage Oil might feel after announcing a $2.7bn (£1.7bn) gas find yesterday – only to watch the firm's stock plummet nearly 30 per cent.
The problem was that investors were expecting oil from the hotly tipped well in the Kurdistan region of northern Iraq. And although the 12.3 trillion cubic feet at the Miran West field is the sixth-largest gas find ever in Iraq, the markets are concerned that the product will prove difficult to sell.
Heritage, however, is confident that Miran West is a world-class find. "This discovery has the potential to generate substantial further value for our shareholders and benefit the people of Kurdistan and Iraq," said Tony Buckingham, the chief executive. But the market remained unconvinced, and the shares dropped 29 per cent to 310p, more than wiping out their gains since Heritage announced the discovery of unspecified hydrocarbons at Miran in November.
Peter Hitchens, at Panmure Gordon, said: "The market has been hoping the discovery would be oil, which is easy to sell. Instead it is gas, which is very expensive to move around and can be hard to sell without a local market."
Spooked investors are overlooking plans for a pipeline from Azerbaijan to Europe, says Mr Hitchens. The six companies building the Nabucco pipeline, including Austria's OMV and Hungary's Mol, are set for a final investment decision this spring, with a view to the scheme being up and running by 2015.