Shares in Sterling fall 17pc after well setback in Kurdistan
Shares in Sterling Energy slumped more than 17pc in early trading yesterday as the company revealed a technical mishap at a well in Kurdistan that it has been drilling.
The UK oil and gas exploration firm, in which telecoms entrepreneur Denis O'Brien has a more than 15pc stake, also said it was still unclear as to whether material hydrocarbon accumulations will be discovered at the well, despite having encountered pressure while drilling.
In a stock exchange statement yesterday, Sterling Energy said that a well had been drilled to a depth of almost 3,400 metres at the Sangaw North-1 field in Kurdistan, northern Iraq.
It noted that some hydrocarbon gas was detected and that the drill pipe subsequently parted at a depth of 850 metres.
Sterling said it planned to retrieve the drill pipe and bottom hole drilling assemble from the well but warned that the operation was challenging and could require additional equipment to be mobilised to the site.
"The entry of hydrocarbon gas into the well, while encouraging, does not provide information as to the potential for material hydrocarbon accumulations in the Jurassic reservoir target," added the statement.
The company said flow tests would be required to evaluate any potential reservoirs encountered. Sterling has a 53.3pc working interest in the Sangaw North-1 field.
"Sterling is focused on successfully completing the current operations in a safe and reliable manner," said chairman Alastair Beardsall.
"Once this is done, well operations will continue to evaluate the potential of the Jurassic reservoir targets."
Sterling is also involved in operations in Mauritania, Cameroon and Madagascar.
Shares in the company closed down just under 12pc at 54p (63c).