Lansdowne Oil market cap halved after poor well results
Irish exploration company Lansdowne Oil and Gas has seen its share price halved since announcing disappointing results from one of its most promising wells.
The company's chief executive, Steve Boldy, has now admitted that Lansdowne is vulnerable to a potential takeover given the slide in its valuation.
The Dublin-based firm has a 20pc stake in the well, which was drilled at the end of July. Its partner on the project, PSE Kinsale Energy, was operating the well and holds the remaining 80pc.
The AIM-listed company said gas was present, but added: "The volumes are not considered commercial [and] the well will be plugged and abandoned."
Shares in the company dived in value almost immediately, falling from 7.26 pence on Thursday to 3.85 pence by close of business in London. The slide continued yesterday, with shares levelling off at about 3.13 pence in late afternoon trading. Lansdowne now has a market capitalisation of just over £5m (€7m). Less than three years ago it had a total value of more than £60m. Mr Boldy said the results were "disappointing" but said the firm still has potential and value in its asset portolio. He said that the company will now look to advance the development of the Barryroe oil field, in which it holds a 20pc share.
Barryroe, located off the Cork coast, is a potentially valuable site that could hold as much as 300m barrels of recoverable oil. So far the project's operator, Irish firm Providence Resources, has struggled to find a farm-out partner to get it off the ground.
"Barryroe is closer to forward production than our other assets so it has carried most of the value of the company in previous years. [It] is the one that we're looking to advance now, it has become more difficult because of the current environment," Mr Boldy said.
Lansdowne recently announced a strategic review of its business. When asked if the firm's drop in market value makes it vulnerable to a buyout, Mr Boldy said: "I suppose it does. We have some large shareholders and we have to find a way forward for them [so] we won't be available at a knockdown price. If you look at the strategic review, we are looking at all options including a sale."