LONDON (SHARECAST) - AIM-listed oil and gas explorer Northern Petroleum has plugged and abandoned its La Tosca-1 exploration well in Italy, saying that it wasn't economical to warrant further drilling.
Drilling operations started on August 6th to evaluate the exploration potential of a gas prospect mapped from 3D seismic data, however the firm said that positive forecasts prior to drilling were not met and indications were of more limited reservoir sand development than expected.
"The considered conclusion was that the data did not provide a sufficiently strong economic case to warrant well completion and testing," the company said.
La Tosca-1 is located around four kilometres north-east of the Alfonsine depleted gas field in the Eastern Po Valley Basin of Italy; it falls within the Longastrino exploration permit.
"Whilst there will not be a well test, the gas shows are encouragement for further work to be undertaken to determine the future potential in the area. Northern's share of the well cost is minimal and the drilling was completed ahead of schedule and conducted in a proficient manner," said Managing Director Derek Musgrove.
"I would also note that the company strategy for limiting the financial exposures, in this case through a farmout process, to effect a mitigation of the exploration risk, was appropriate."
Shares fell 1.49% to 66p in early trading on Friday.