Chariot Oil & Gas (LSE:CHAR) fell 55.7pc to 3.5p this morning after announcing the failure of its highly-anticipated Prospect S well in Namibia. The firm, which now has a £12.8m market cap, said the well did not encounter a hydrocarbon accumulation after being drilled to 4,165m.
The well penetrated turbidite reservoir sands as anticipated but these turned out to be water-bearing. It will now be plugged and abandoned. Despite the failure, Chariot said it will use the data collected from the drill to better understand the prospectivity of its surrounding area.
Chief executive Larry Bottomley said: ‘Whilst very disappointing that we have not established a hydrocarbon accumulation in the prospect, we have learnt valuable information about the reservoir potential of these turbidite systems which form the primary targets across many of the prospects within the Central Blocks portfolio. We will further evaluate the extensive data gathered in the well to understand the implications for the Central blocks portfolio.
Chariot has shown that it is capable of safely and efficiently operating a deepwater well, delivering the operation within a short timeframe to capture the optimum point of the cost cycle. With all licence commitments now met across the entire portfolio, the Company is fully-funded to progress our assets in Morocco and Brazil whilst remaining vigilant to other value accretive opportunities.’
Today’s bad news follows Chariot’s failed drill in Morocco earlier this year. The firm failed to find any accumulation of hydrocarbons at the Rabat Deep 1 well, where it owned a 10pc stake.