Falkland Oil & Gas (FOGL) has announced its Toroa F61/5-1 exploration well, located in the Falkland Islands, has failed to discover any hydrocarbons and has, therefore, been sealed and abandoned. Following the news, the company’s shares plummeted by 60%. A number of oil exploration companies have been drilling offshore the disputed islands, which has triggered renewed diplomatic tension between the UK and Argentina, bringing to the surface bad memories of the war over the islands in 1982. Earlier this year, British oil explorer Desire Petroleum said it had found poor quality oil in the first well to be drilled in the Falkland Islands for ten years.
Desire, as well as several other explorers, have been optimistic about discovering large quantities of oil in the North Falklands basin. Last month, Rockhopper Exploration said it was embarking on a £48.5 million rights issue after striking reserves of oil in the region. Meanwhile, FOGL said it is hopeful that the Toroa prospect, in which it has a 49% interest, has around 1.7 billion barrels of recoverable oil and will conduct further assessments. Chief executive Tim Bushell said: “Whilst the results of the Toroa well are disappointing, it has to be remembered that this is the first well in a previously undrilled frontier basin. “We believe that these results have helped to reduce some of the key risks of the plays in the deepwater areas of our licences,” he added.