LONDON (ShareCast) - Premier Oil (LSE: PMO.L - news) has disappointed its investors with the announcement that the Spaniards East Well in Block 15/21, in which it has a 28 per cent operating interest has been plugged and abandoned as a dry hole.
Although the well encountered 75 feet of Jurassic sands, these were shown to be water wet on the logs.
Serica Energy (Berlin: A3P.BE - news) , Parkmead (12.624%) and Faroe Petroleum (LSE: FPM.L - news) (8.4%) also each have a stake in the well. Both Parkmead and Faroe have confirmed that they will not be required to make any cash contribution to the dry-hole cost of this well.
Graham Stewart, Chief Executive of Faroe Petroleum, commented: "Although the Spaniards East well carried a reasonably high level of risk, we agreed to participate, given the upside potential in the event of success, and the fact the well was drilled at no cost to Faroe Petroleum."
Tony Craven Walker, Chairman and Interim Chief Executive Officer added: "There was a reasonable pre-drill expectation that the Spaniards discovery extended over a wider area and, given its proximity to existing production facilities, could therefore be commercial.
"Whilst a full analysis of the well results will be required before a final conclusion can be reached, the initial interpretation now indicates that the accumulation is likely to be confined to a more limited area around the original discovery well."