IOG PLC (AIM:IOG) shares slumped in Tuesday’s early deals after the company reported pressure issues and an influx of non-commercial quantities of gas in the Blythe-2 well drilling programme, which are expected to result in delay.
The gas comes from a reservoir that is not the well’s target which, according to IOG, remains isolated and separate.
Previously, on 5 March, the company told investors that the drill programme would take around three month to drill, complete and hook-up.
Now, however, the newly encountered well issues “look likely to impact the expected well duration”, it said, with an additional four weeks. The fix for the well could potentially involve a side track of the well.
The impact on costs, meanwhile, will depend largely on the speed of resolution, it added.
"Encountering a gas and oil influx while drilling through the overburden above the reservoir is a known risk in the Southern North Sea,” said IOG chief executive Rupert Newall.
“Associated drilling fluid losses present an additional challenge, however, this is being actively and safely managed by Petrofac, the well operator, and Shelf, the drilling contractor, working closely with the IOG team, to ensure that drilling ahead can be safely resumed."
In London, IOG shares fell 14.8% to trade at 5.1p, valuing the North Sea junior at £26.78mln.