Eco Atlantic (LON: ECO) shares plunged Friday after the company said the Gazania-1 well on Block 2 did not show evidence of commercial hydrocarbons.
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The well, which spudded on October 10, reached a target depth of 2,360m, but after the latest update, it will now be plugged and abandoned.
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Eco Atlantic told investors the well logging is currently underway, with its joint venture partners set to undertake a “detailed analysis” of the results.
“While the well results are obviously disappointing at this location, we remain optimistic for this basin and look forward to continuing our exploration efforts,” said Colin Kinley, Co-Founder and Chief Operating Officer of Eco Atlantic.
He added: “Gases normally associated with light oil were encountered throughout the drilling of the Gazania-1 well. This, in our view, confirms the active hydrocarbon system, proven by the A-J1 discovery well in 1988, extends to the part of the basin where the Gazania-1 well is located. Further seismic interpretation will likely lead to the definition of viable areas for trapping downdip of Gazania-1 closer to the 1988 oil discovery A-J1.”
The company said it will now move on to executing its plans for more exploration wells, which includes a two-well campaign offshore South Africa set to begin in 2023, with another in offshore Guyana.
The news has resulted in Eco Atlantic shares plunging, with the stock currently down over 52% at 20p per share. It initially hit a low of 15p.
