Shares in Independent Oil & Gas (IOG) slid this morning after the firm said an appraisal well at its Skipper discovery in the North Sea drew a blank.
IOG said sample analysis, being carried out in Aberdeen, could show that fewer development wells will be needed at Skipper, improving the economics of the project.
But the well did not encounter hydrocarbons in two formations below the main field, which is estimated to contain 34.1 million barrels of recoverable oil, with the update sending shares down about 15 per cent to 24.75p in early trading.
Chief executive Mark Routh said: “We are extremely pleased to have achieved drilling success at the Skipper well, our first operated well. We are encouraged by the good quality oil samples retrieved, the well’s primary objective. Initial observations strongly suggest we have a better oil viscosity than the CPR estimates.
“Whilst the exploration prospects did not encounter hydrocarbons, I am increasingly confident that the commerciality of the Skipper field has been confirmed now that we have the data we need to progress to the field development planning.”