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After months of speculation, Pancontinental has hit a dry hole in its first much-hyped Cormorant exploration well.

A dry hole is when no oil or gas are found.

The stock fell 71 per cent to an intraday low of 0.2c before closing the day at 0.3c.

On Monday, CEO John Begg described the result as “disappointing”.

“We’ve been years building to this point,” he told Stockhead. “We know there is a working oil source in the area, but the trap hasn’t worked, basically.”

An oil trap is a pool of oil trapped underground.

“It’s the nature of exploration. This was a very well credentialed well and with companies with tremendous insights into exploration… but it hasn’t in this instance been successful.”

Mr Begg says they are going to look at opportunities to “reset” the company, assess the Cormorant well information secured over the weekend, and emphasised that it doesn’t change anything around their plans for the PEL 87 area in the south.

He said they also have a Perth Basin gas brownfield project to look at.

Pancontinental shares over the last 12 months.

Pancontinental (ASX:PCL) has been talking up the Cormorant exploration program since March, when a rig was contracted to drill the first well in the PEL 37 licence area.

Pancontinental CEO John Begg had called the offshore Namibian sea a “global oil hotspot” and was particularly enthusiastic when Exxon took a licence to the south of the PEL 37 area.

The company speculated that it could extract 124 million barrels of oil from the Cormorant prospect could and that the whole PEL 37 area could hold as much as 915 million barrels.

“Cormorant is not the biggest one — but it is the one the joint venture has chosen to drill first because we think it has the best chance of success,” Mr Begg said.

On Monday those illusions were partially shattered.

The Cormorant 1 well hit a depth of 3855m without finding anything.

What they did find were water-wet sands and claystones rather than showing wet gas — gas that is saturated with liquid vapour.

Signs of gas in the shale rock above had suggested there’d be oil below.

The company tried to console shareholders, saying the geological data they got from the drilling suggests there are still opportunities elsewhere in the PEL 37 area, and could even be useful for exploration in the southern PEL 87 block.

Pancontinental owns 30 per cent of PEL37, while the operator Tullow owns 35 per cent. ONGC Videsh has another 30 per cent and Paragon Oil & Gas has 5 per cent.