Aberdeen-based oil and gas company Faroe Petroleum saw its shares slump yesterday.
The fall came after the firm said a well drilled on the Marsvin prospect in Norwegian waters had failed to find hydrocarbons.
Graham Stewart, chief executive of Faroe, said: “The results for this first well on Marsvin were disappointing, however, the licence holds a number of additional promising prospects adjacent to the substantial Trym gas field, in which Faroe has a 10% interest and for which a near-term development plan was submitted early this week.”
Faroe has a 14% stake in the licence area in which the Marsvin prospect was drilled. The company’s shares closed last night down nearly 24% at 63.25p.
Faroe’s shares broke through the £2 mark in May, but have fallen heavily since then. Yesterday’s tumble wiped more than £20million off Faroe’s market value, bringing it down to about £66.25million.
A spokesman for the Aberdeen company said the wider market had taken a bad turn for part of the day and the firm was one of the unlucky ones to take a big hit following news of the dry well.
Just last month Faroe said it was continuing to make good progress in the development of its portfolio.
It has one of the most active drilling programmes among Alternative Investment Market-listed companies and a growing production base.
Faroe said the period ahead was the most active in its history, with eight wells expected to be drilled in the second half of 2008 alone and many more to follow as prospects matured for drilling and participation in further wells was secured.
The Aberdeen group added that it would also be continuing to replenish its portfolio organically, and through taking part in three licensing rounds in 2008, in the UK, Norway and Faroe, with awards scheduled for the fourth quarter of this year and first quarter of 2009.
Faroe reported losses of £300,000 for the six months to June 30, against a deficit of £600,000 a year earlier.
Turnover for the period, all from gas production, was £700,000 compared with £100,000 the year before.
The company added that at June 30 it had cash in hand of £41.9million, up from £29.7million a year earlier.
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