Serica Energy’s shares have plummeted on the London Stock Exchange after it reported underwhelming findings from its exploration well in North Eigg, off the coast of Scotland.
The independent oil and gas trader’s share price has dropped 8.7 per cent on the FTSE AIM UK 50 Index in today’s trading, after chief executive Mitch Flegg announced the prospect “has not delivered the result we had hoped for”.
The firm revealed that only non-commercial volumes of gas had been encountered at the site – with Serica now set to re-evaluate its drilling operations in the region.
The well will now be suspended pending further work determining the volume of extractable hydrocarbons.
The outcome was a blow for Serica’s domestic ambitions, with Flegg confirming it was looking to opportunities elsewhere to meet its ambitions.
He said: “While we believe in the importance of the UK Oil & Gas sector, we are now considering opportunities in other countries alongside those in the UK as we continue to seek to expand our portfolio and create value for all of our stakeholders.”
Serica estimates the project will cost the firm £13m after tax.
The disappointing update comes with further pressure on the North Sea production, after the Government recently toughened the windfall tax from 25 to 35 per cent and expanded the levy from three years to six years.
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