Longboat Energy PLC (AIM:LBE)y shares dropped back some 14% in Wednesday’s early deals as a new gas discovery offshore Norway underwhelmed.
The exploration company, in a statement, told investors that the Velocette well has made a "minor" discovery – with a gas column measuring around nine metres.
Analysis suggested Velocette volumes would be at the lower end of pre-drill expectations, the company added, and that the discovery is therefore “not considered to be commercial in isolation”.
It added, meanwhile, that the licence retains numerous other prospects which have now been derisked by the discovery of gas in good quality reservoir.
Velocette will now be plugged and abandoned, it added.
"Although we are disappointed not to have made a commercial discovery in Velocette, the presence of good quality sandstone reservoir, which was the main pre-drill risk, and the presence of gas is encouraging,” said Longboat chief executive Helge Hammer.
“There is significant follow-on potential that has been derisked with this result and we will be working with our joint venture partners to mature these opportunities further."
Longboat owns a 20% interest in the Velocette project, alongside operator OMV Norge (with 40%) and INPEX (with 40%).
In London, Longboat shares were down 3.17p or 13.77% trading at 19.83p each.