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(Sharecast News) - Oil and gas explorer and developer Eco Atlantic announced on Friday that the Gazania-1 well on block 2B, offshore South Africa, which spudded on 10 October, reached its target depth of 2,360 metres, but did not show evidence of commercial hydrocarbons.
The AIM-traded firm said the well would now be plugged and abandoned, as planned.
It said well logging was currently ongoing, with the joint venture partners to undertake a detailed analysis of the results, which would inform future plans.
The company said the partners submitted a production right application to the Petroleum Agency of South Africa (PASA) on 15 November for block 2B, based on the existing oil discovery of AJ-1 and potential future operations.
As a result, the partners would have time to conduct further analysis and integration of the Gazania-1 well data to allow them to determine the next steps on the block.
The company, alongside its joint venture partners, would now move on to executing its plans for more exploration wells, including a two-well campaign on block 3B/4B offshore South Africa planned to begin in 2023, and at least one well into cretaceous targets on the Orinduik Block, offshore Guyana.
As announced by the operator of Block 3B/4B, Eco Atlantic said a collaborative farm-out process for up to a 55% gross working interest had been ongoing.
"We very much appreciate the stakeholder and shareholder support on this well that was safely drilled with no environmental issues," said co-founder and chief operating officer Colin Kinley.
"Early challenges with weather and service logistics on this well cost us a bit of time to get started, however we are happy with the overall technical operation of the well.
"Gases normally associated with light oil were encountered throughout the drilling of the Gazania-1 well."
That, in the company's view, confirmed the active hydrocarbon system, proven by the A-J1 discovery well in 1988, extended to the part of the basin where the Gazania-1 well is located, Kinley said.
"Further seismic interpretation will likely lead to the definition of viable areas for trapping downdip of Gazania-1 closer to the 1988 oil discovery A-J1.
"While the well results are obviously disappointing at this location, we remain optimistic for this basin and look forward to continuing our exploration efforts."
At 1302 GMT, shares in Eco Atlantic Oil & Gas were down 54.4% at 19.15p.
Reporting by Josh White for Sharecast.com.