Shares at Irish explorer tumble 50%

Shares in Irish explorer Fastnet Oil & Gas tumbled by 50% yesterday on the back of its maiden drilling round finding no commercial hydrocarbons.

Fastnet has a share in two Moroccan licences being operated by US firm Kosmos Energy and the next drilling in the area isn’t expected to get under way until late 2014/early 2015.

The FA-1 well in the highly anticipated Foum Assaka offshore licence was drilled to a total depth of 3,830m but plugged and abandoned after failing to encounter commercial hydrocarbons. The work did encounter elements of oil and gas, suggesting some presence of a working petroleum system.

The Dublin firm’s managing director, Paul Griffiths, attempted to inject some positivity by noting that drilling was completed within budget and provided “valuable information” supporting the ongoing evaluation of the licence.

“Fastnet is pleased that its strategy of funding high risk/high reward drilling, offshore Morocco, by means of its previously announced farmout, allows the company to fully participate in the further evaluation of the prospective areas of the licence,” he said.

Fastnet’s share price closed down 50% in Dublin yesterday, falling from 16c to a fresh annual low of 8c, while also shedding nearly 44% in London.

However, the company’s management said it remained upbeat on the prospects for some recovery in the stock’s performance.

Fastnet could finish this year with around €50m cash in the bank after it agrees a farmout deal regarding its Irish asset portfolio.

Next year is due to see further drilling at its Moroccan assets and maiden drilling work undertaken in its offshore Ireland portfolio in the Celtic Sea.

Last week, the company saw positive share price movement on the back of 3D seismic survey results showing 22 indications of oil at two of its Irish assets.

A farm-in partner is still expected to be announced, for Fastnet’s Irish interests sometime during the summer.