The share price of African focused oil and gas exploration company, Chariot this week took a major tumble after the explorer announced that it had found no oil off the Namibian coast.
Chariot's share price fell on Monday to a yearly low of 75 pounds upon confirmation that no commercial hydrocarbons were found in the Tapir South exploration well in Northern Block 1811A and the well will be plugged and abandoned.
The first well of Chariot's four to five well drill programme, Tapir South was rated as having a 25% chance of success and was targeting resource potential of some 604 million barrels of oil. But after reaching a total depth of 4 879 meters, the well was found to contain no commercial hydrocarbons despite the penetration of reservoirs that Chariot described as "excellent".
Although disappointed, Chariot CEO Paul Welch said that analyses of the results from the Tapir well will provide invaluable information on its exploration activities going forward.
He said:"Whilst the results of the Tapir South well are disappointing, this is the first well of a longer term drilling campaign within a frontier region and only the second well ever to have been drilled in the Namibe basin. Our understanding of this basin is rapidly improving and we expect this well to provide more information on the character and maturity of the potential source rocks when we carry out detailed analyses on the recovered samples."
"These analyses will provide invaluable information for improving the assessment of source risk on other prospects in close proximity whilst also furthering our knowledge of the region."
Company spokesperson, Julia Webb reiterated Welch's sentiment telling the Economist upon enquiry that they will still continue with their drilling programme despite the setback but at a much more informed position.
"The results from the Tapir South well will be invaluable in furthering the company's knowledge of the region. Initial data shows that Tapir South had excellent reservoir quality. We will come back to exploration in the Namibe basin once we have fully evaluated and understood the information from the well," Webb saidFocus will now shift to Chariot's' second well, the Kabeljou, in the Southern Blocks expected in the third quarter of this year. "This well is in the Orange basin, rather than the Namibe basin and so is geologically distinct from Tapir South," Webb said.
She is confident that Chariot will soon strike oil in Namibia. Webb said: "The prospectivity of the Central and Southern blocks, which sit in separate basins from Tapir South, remain unchanged and we thus continue to believe that there is potential for large oil volumes offshore Namibia. Chariot's first well is anticipated to cost approximately US$70million and the Maersk Deliverer rig which was used in drilling the Tapir well is now headed for Angola on a long term contract with Chevron.