SHARES in Faroe Petroleum fell 5% after the Scottish oil and gas firm announced it had suffered its second drilling disappointment in a month.
Aberdeen-based Faroe Petroleum said a well drilled to test the T Rex and Bolan prospects deep beneath the Norwegian Sea had not found oil in commercial quantities at either site.
It said the well found a thinner-than-expected reservoir of oil at T Rex, which was the primary target. Operated by Maersk Oil, the well also found oil in the Bolan prospect but not in sufficient quantities to persuade the partners to run production tests.
Three weeks ago, Faroe Petroleum said that a well to test the Kalvklumpen prospect in the Norwegian North Sea was dry.
The twin reverses provide a reminder for investors of the challenges that explorers face, even in areas that have proven potential.
Faroe Petroleum has climbed rapidly up the ranking of independents in recent years, helped by drilling successes in Norwegian and UK waters.
The latest well was drilled in the same area as the Maria discovery in 2010.
The original T Rex discovery was made in 1991 by Statoil, which operates producing oil fields nearby. With stakes of 30% and 70% respectively in the licence, Faroe and Maersk will evaluate the data they have collected before deciding on their next move.
The latest well reached 4183 metres below the seabed and was likely a costly exercise.
Graham Stewart, chief executive of Faroe Petroleum, said the company was disappointed the reservoir intervals were not as thick as it had hoped for. He added: "The well does, however, provide very important new data and information which will allow further evaluation and de-risking of this exciting exploration province in which Faroe has a number of licences."
Analysts at Nomura Equity Research told clients: "We remain buyers of Faroe Petroleum owing to its funded multi-well programme this year."
Faroe expects to drill a well west of Shetland and two in Norwegian waters in the second quarter.
Shares in Faroe closed down 8.25p at 156.5p.
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