Wednesday, February 9, 2011

Shares of Oil and gas firms declined after drill setback

Shares of Oil and gas Shares in three oil and gas firms that are active in the North Sea declined following a disappointing update on drilling in an area where they have made big finds.

Nautical Petroleum, Encore Oil and Premier Oil lost ground following the Catcher North well in the Central North Sea finding a less hopeful oil and gas bearing area than expected.

The results of the well had been eagerly projected after the success of the Catcher and Catcher East wells in the last year.

Sector watchers stated that the first Catcher find was the biggest oil discovery in the North Sea for decades when it was made in the month of June.

However, the band of oil bearing area encountered by Catcher North was at the bottom end of pre-drill expectations. The results affirmed that the three Catcher discoveries are part of one big field rather than separate stores.

The chief executive of Premier, Simon Lockett, said the company had cut down on its estimates for the overall oil reserves in the Catcher, Catcher North and Catcher East discoveries to between forty million barrels and eighty million barrels from sixty million barrels to hundred million barrels.

Encore shares traded sixteen percent down during the closing period which is twenty three and a half pence at one hundred and twenty eight pence.

Shares of Nautical Petroleum declined sixteen percent or eighty seven pence to four hundred and fifty five pence Shares in Premier, which also has interests in Asia, declined by seven percent or one hundred and forty six pence to hit one thousand nine hundred and ninety four pence.

Shares in all three firms had a good run in during the time of the first two Catcher finds. Yesterday’s declines suggested that the share prices of oil and gas exploration firms can be sensitive to the results of individual wells.

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