Lansdowne Oil & Gas shares hit by negative talk

SHARES in Lansdowne Oil & Gas fell sharply yesterday amid speculation that farm-out discussions over a key oil field may not be progressing to plan.

The reports said further appraisal drilling may be required at the Barryroe field. Picture: Getty
The reports said further appraisal drilling may be required at the Barryroe field. Picture: Getty

The reports also said that further appraisal drilling may be required at the Barryroe field in the north Celtic Sea which Lansdowne is a 20 per cent partner in.

Lansdowne, demerged in 2006 from Aberdeen-based plc SeaEnergy which still owns a significant stake in the company, issued a statement referring investors to a response by its partner in the field Providence.

Providence said it believes there had been “no material change” to the outlook presented in its end of year statement in December 2013.

“As publicly stated, Providence’s strategy for the future appraisal and development of the Barryroe oil field is to co-venture with a suitable financially and technically capable third party,” it said.

“The parties with which Providence is currently in discussions include major Asian, European and North American oil companies.”

The company also pointed out that given the current “pre-development nature” of the Barryroe project, an element of further appraisal drilling has “always formed an essential part of these discussions”.

Providence said further updates in relation to the Barryroe farm-out will be provided “as and when appropriate”.

The Barryroe field has had six wells successfully drilled and in September Lansdowne valued its stake at £421 million.

Shares in the Dublin-based company, in which SeaEnergy holds a 21.48 per cent stake, closed down almost six per cent, or 1.62p, at 25.75p. In SeaEnergy they closed down 0.5p at 31.75p.

SeaEnergy’s latest results showed it narrowed its losses during the first six months of its financial year to £612,000 from £1.7m as the Aberdeen-based firm switches from being a wind farm developer and oil and gas investor into an energy services outfit.

Meanwile shares in Rockhopper Exploration, the company exploring for oil around the Falkland Islands, also fell yesterday after it confirmed that Peter Dixon-Clarke intend to step down as finance director in early 2014.

It said the company was well advanced in making an appointment of a successor and that Dixon-Clarke will remain on as consultant for an interim period to support the company whilst his replacement is appointed. The company added that as well as the recent appointment of Keith Lough as a non-executive director, the company also expects to make an additional non-executive appointment shortly.

Earlier this month Rockhopper announced it had completed the process to select the technical approach it will take to the Sea Lion Development with partner Premier Oil.

A final investment decision is likely to be taken in the first half of 2015 and Rockhopper continues to expect first oil around four years later.

Shares in Rockhopper closed down 6p, or 3.79 per cent, at 152.5p.