Trap Oil shares sinks as Scotney well disappoints

Declining revenues from oil and gas production will throw up fresh fiscal challenges for the UK and Scotland. Picture: TSPL
Declining revenues from oil and gas production will throw up fresh fiscal challenges for the UK and Scotland. Picture: TSPL
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SHARES in North Sea driller Trap Oil withered yesterday after the firm said its Scotney well had come up dry.

The firm, which bought ­Aberdeenshire-based Reach Oil & Gas in 2011, said the well had been drilled to 10,600 feet ­according to the terms on the exploration licence.

It said: “The well penetrated thin sands with no significant hydrocarbons overlying a number of limestone stringers [a thin discontinuous rock layer].

“There are no plans to conduct a drill stem test and the well is to be plugged and abandoned.”

Trap has a 12.5 per cent interest in the licence. Its partners in the Scotney licence are operator Suncor Energy UK, with a 28.75 per cent stake, Norwegian Energy Company UK with 43.75 per cent and First Oil & Gas, which has 15 per cent.

Despite the disappointment, Trap has more irons in the fire and can pay for its programme of exploration thanks to an interest in the producing Athena field, cash on its books and a £12.7 million debt facility.

The group floated two years ago and used half of the £60m proceeds to buy Reach. It sold the latter’s interest in the Lace­wing oil discovery and bought a stake in Athena for £34.5m.

It hailed a milestone earlier this year when it secured a one-third share of a North Sea gas field in exchange for drilling and operating the well.

The company was keen to become an operator, and has bought into three fields where it aspires to carry out the work.

It has also tried a different tack by drafting in Extract Petroleum to help it look for oil in acreage to the east of Shetland.

Shares in Trap Oil slumped 19 per cent to 11p after the Scotney news, highlighting the pressure on the firm to bring home the bacon with a major find.