UPDATE 1-Niko reports another dry well in Indonesia, shares plunge

Fri Nov 9, 2012 8:55pm IST

Stocks

   

(Adds analyst comments, share movement)

Nov 9 (Reuters) - Oil and gas producer Niko Resources Ltd said another one of its offshore wells in Indonesia came up dry, sending its shares down as much as 25 percent.

BMO Capital Markets analyst Jared Dziuba said the latest well is the fourth one to turn up dry in its 2013 Indonesian program.

"Aside from a lack of exploration success to-date, funding concerns continue to weigh on the company, particularly ahead of a convertible note repayment in December," Dziuba added.

Earlier this week, Niko reported a dry well in Trinidad, hurting the company's plans to raise output outside India where it is grappling with falling volumes.

Niko and partner ENI SpA abandoned another Indonesian well in September.

The Canadian company started an extensive drilling program in September in Indonesia where it has production-sharing contracts on 22 offshore blocks.

"This dry well was very disappointing and will lead to downward pressure on the share price for the foreseeable future," Cannacord Genuity analyst Christopher Brown said.

Shares of the Calgary, Alberta-based company were down 16 percent at C$9.95 in early trade on the Toronto Stock Exchange on Friday. As of Thursday, they had lost about 79 percent of their value in the preceding 12 months.

Niko said it now plans to begin drilling the Ajek-1 well in the West Papua region of eastern Indonesia.

The company also operates in Bangladesh, Pakistan, Madagascar and the Kurdistan region of Iraq. (Reporting by Maneesha Tiwari and Ankur Bannerjee in Bangalore; Editing by Joyjeet Das and Sreejiraj Eluvangal)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Jaitley's Health

REUTERS SHOWCASE

Alibaba IPO

Alibaba IPO

IPO ranks as world's biggest after additional shares sold   Full Article 

President-Elect

President-Elect

Ghani named Afghan president-elect after deal to end election dispute  Full Article 

G20 Meet

G20 Meet

G20 says nearing growth goal, but more needed from Europe  Full Article 

Asian Games 2014

Asian Games 2014

Full coverage of the 17th Asian Games as Incheon.  Full Coverage 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage