Soaring oil prices are no good if you can't find oil, and Premier Oil and Encore Oil have abandoned a North Sea well after disappointing results.
The Catcher north well found lower than expected traces of oil, causing Premier to reduce its expectations for the whole Catcher/Catcher East area from 60m-100m barrels to 40m-80m. The news has left Premier - which has 35% stake - 115p lower at £20.25. Encore, down 25.25p to 126.25p, and Nautical Petroleum, 74.25p lower at 467.75p, both hold 15% interests, with the rest owned by Agora Oil and Gas and Germany's Wintershall.
On Premier, William Arnstein at FinnCap said:
While a substantial downgrade to discovered resources at the Catcher field is a major disappointment, follow on exploration potential in the immediate area is substantial and the stock appears cheap at current spot oil prices. As such we remain mid-to-longer term buyers of Premier but appreciate that they may underperform in the very short term.
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