LONDON (Alliance News) - Shares in Nostra Terra Oil & Gas Co PLC dropped on Monday after it said it shut down operations on the C8 well in the Permian Basin in Texas, having encountered a high-pressure inflow of salt water.
Nostra Terra shares fell 11% at 4.33 pence on Monday.
Drilling operations at the well were shut down after salt water was encountered at 2,195 feet, several hundred feet above the main target reservoir. The well was then shut in for safety reasons, and Nostra Terra said a cement plug is being set to permanently and safely abandon the well.
Data gathered from the C8 drilling operation will go towards planning future wells on the lease area, Nostra Terra said, and the majority of the budget set for the C8 well is expected to be put towards drilling a new well in the near future.
"Drilling operations were running smoothly including oil shows in the initial targeted formation. However, once the surge was encountered the group quickly made the decision to shut down operations for the safety of the drilling team and to limit financial exposure in order to allocate funds to other future wells," said Chief Executive Officer Matt Lofgran.
"Although this isn't the result we were hoping for, the oil field isn't without risks. We plan for this by having a larger and carefully balanced portfolio. Our exposure is only approximately 3% of our current market capitalization," Lofgran added.
Nostra Terra (NTOG)