Earlier this week the Government revealed it had to borrow an extra £600m to plug the gap between spending and tax revenues.
According to the ONS, part of this was because of a fall in revenues from the black gold in the North Sea.
And this morning there was one less potential oil-revenue stream for the treasury, as Aberdeen-based Faroe Petroleum said it would be plugging and abandoning its Cooper well when it couldn't find any oil or gas. As it explained: "A formation drill stem test (DST) has been performed on the Garn Formation, however no hydrocarbons flowed to surface."
The company is now hoping that the lack of oil is a local issue and the rest of the reservoir is more useful to its future.
The news sent the AIM-listed company's shares down 12.8p, 8%, to 146.5p.
The well is part owned and operated by British Gas parent company, Centrica (up 3.6p at 326.9p), which has a 40% stake, Suncor has a 30% and Faroe the remaining 30%.
Graham Stewart, Chief Executive of Faroe Petroleum, said:
Although the DST results on the Garn formation were disappointing we take encouragement from the discoveries made at multiple horizons and that the poor flow characteristics of the Jurassic reservoir observed in this well are not seen in the other nearby producing fields.
We will continue to evaluate the large amount of data that has been collected in the Cooper well to try to resolve why the Garn formation is tight and whether this is likely to be a local or a field wide reservoir phenomenon.
Analysts seemed unconcerned with the latest development.
Leila Reddy at Panmure Gordon said:
The DST test on the Copper well was disappointing with no hydrocarbons flowing to the surface. The silver lining is that this flow characteristic may be a localised rather than a field wide reservoir property. We have revised our target price to 218p (previously 225p).
And Sam Wahab at Seymour Pierce said:
This is clearly disappointing news for Faroe, with Cooper previously being the company's only exploration success story so far this year.
Nevertheless, Faroe's high impact drilling campaign continues with the North Uist well with results expected imminently. In addition, the company intends to drill the Spaniards well in the UK North Sea in October 2012.
