Shares in the Falklands-focused oil explorer Desire Petroleum bounced back yesterday, gaining more than 10 per cent despite the apparent failure of a closely watched sidetrack well at its Rachel prospect in the South Atlantic.
Desire admitted it had faced debris in the sidetrack on Monday night, but said this was routine and they were working to repair it. However, just a day later, the company issued a fresh statement that said a clean up would not be possible.
Desire said it was encouraged enough to drill another well on the Rachel prospect because of data acquired during the drilling which indicated around 25 metres of sand with traces of oil.
That appeared to be enough for investors who have made the stock one of the bigger gambles to be seen on the London Stock Exchange, causing sharp swings in the share price in recent weeks.
They chased the shares 9.5p higher to 101.5p yesterday, driven by excited chatter on a web bulletin board, reminiscent of the sort of excitement that once saw dot.com companies soaring into the stratosphere based on page impressions rather than real earnings, and often, real business plans.
There had also been speculation that the company could be a takeover target. The shares had fallen sharply after Monday's news.
The Falklands has been attracting huge excitement among some investors given the prospect of oil in the waters surrounding the islands although the results have been mixed so far and larger oil companies are conspicuous by their absence.Reuse content