Mosman Oil and Gas Ltd (AIM:MSMN) announced that the Garcia well was unsuccessful.
The 20%-owned exploration well reached a total depth of 1,288 feet, and gas testing was carried out, but water was encountered in the target Lyons formation.
A flow test at the top of the formation showed a small amount of helium but had weak flow.
Project partners Mosman and Vecta Oil & Gas decided to halt drilling prematurely.
"Given the disappointing results obtained from the Vecta Project thus far we have entered into discussions about potentially concluding the drilling programme early, reflecting our commitment to preserving cash resources and with the intention of allowing us to focus our full attention and financial resources on the Sagebrush and Coyote Wash helium projects,” interim chief executive Howard Mclaughlin said.