Testing at the Shabeel North well being drilled at Puntland, onshore Somalia, has failed to find oil, according to statements made Monday by two partners in the well.
The share prices of Range Resources and Red Emperor both saw hefty falls in early morning trading after the two London-listed companies reported that their partner in Somalia, Horn Petroleum Corporation, had so far not found any traces of oil after drilling to a depth of 6,420 feet.
An open hole drill stem test (DST) conducted by operator Horn over a 165-foot gross interval between 6,265 feet and 6,420 feet, which contains several sands in the upper portion of the primary Jesomma Formation that has had oil shows elsewhere in Somalia. But the test recovered fresh water without any traces of oil.
The companies said that the current plan is to drill ahead to the originally-planned target depth of approximately 7,875 feet, which will penetrate the remaining section of the Jesomma sands.
Oil analysts at London-based investment bank FoxDavies Capital commented: "The news that the mini well test has flowed water opposed to oil is certainly a disappointment, but not yet the killer that it sounds like it is; it must be remembered that the target horizons are significantly deeper and drilling will now continue to these deeper target horizons."
Horn, Red Emperor and Range are collaborating on a number of wells in Puntland.
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