Advance Energy PLC (LON: ADV) shares have plunged 95.5% since Wednesday, 19 January 2022, after the firm announced disappointing drill results at its Buffalo-10 well.
The oil and gas company has operations in Timor and had warned investors that the drilling programme at Buffalo-10 well, located in offshore Timor-Leste, had only identified minimal amounts of oil.
On Wednesday, the announcement spooked investors, leading to an 85% drop in Advance Energy’s share price. Earlier today, the company announced that it had decided to plug and abandon the well putting the final nail into the disappointing well’s operation.
Leslie Peterkin, Advance Energy’s CEO, commented: “The results of B-10 are both disappointing and hugely surprising given the independently verified risk assessment which confirmed a highly likely commercial outcome from the well. Across the JV, we invested a significant amount of technical work into the project, which underpinned our high degree of confidence that the well would unlock the significant value of the field.”
“The post-well evaluation indicates that the well was drilled into the hanging wall of a fault, although uncertainty in seismic resolution also contributed to the reservoir being significantly deeper than expected at this location. It is not the case that this result means that all of the attic oil volumes certified by RISC have been negated. The Buffalo Joint Venture will conduct further technical analysis in the coming weeks to fully understand why the attic was not encountered as prognosed at the drilled location.”
The CEO confirmed that it was highly likely that the firms involved in the joint venture would relinquish the Buffalo asset since neither company is interested in further exploring the asset.
The company reassured investors that it was well-funded over the near term, that it was exploring other opportunities in its pipeline and was keen to bring at least one project to fruition this year.
Today’s announcement saw ADV shares fall over 60% from Friday’s closing price and hopefully marks an end to the downtrend associated with the Buffalo-10 well.
*This is not investment advice. Always do your due diligence before making investment decisions.
Advance Energy share price.
Advance Energy shares have plunged 95.52% since Wednesday falling from an opening price of 4.92p to a low of 0.22p today.
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