FOGL Shares Drop on Scotia Well Results (Falkland Islands)

Shares in FOGL, the company focused on exploration offshore Falkland Islands, today dropped 42.8 pct after the company announced the results of drilling at Scotia offshore well.

The well, located 315 km east northeast of Stanley, Falkland Islands, has proven a working hydrocarbon system, FOGL said in a statement. FOGL added that although strong gas shows were encountered whilst drilling the target section, the evaluation of the main interval using a wireline formation testing tool did not flow hydrocarbons, indicating that the reservoir has low permeability.

FOGL will now plug and abandon the well and this is expected to take approximately 10 days. The Leiv Eiriksson semi-submersible rig, owned by Ocean Rig, is being used at Scotia.

Tim Bushell, Chief Executive of FOGL said: “The results of the Scotia well provide further endorsement of the hydrocarbon potential of the South and East Falkland Basin and have proven the presence of hydrocarbons within the mid Cretaceous Fan Play. We now plan to fully evaluate the results of the Loligo and Scotia wells.”

FOGL is the operator of the well, holding a 40% interest, whilst Noble Energy Inc. holds a 35% interest and Edison International Spa, holds the remaining 25% interest. Under the terms of the farm-out agreements, FOGL is paying 15% of the costs of this well.

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Offshore Energy Today Staff, November 27, 2012