Finder Energy boss Damon Neaves has played down the disappointment of a dry well at its Kanga-1 offshore prospect, saying the recently-listed company remains highly leveraged to drilling success.
Shares in Finder tumbled 6.5¢, or 35 per cent, to 12¢ on Friday after the Diamond Offshore Ocean Apex semi-submersible drilling rig found no commercial hydrocarbon after drilling to a depth of 3400m in exploration permit WA-412-P exploration permit in the North West Shelf 163km north of Karratha.
Finder, which holds a 15 per cent stake in the permit with operator Malaysia’s SapuraOMV holding the balance, said the well would now be plugged and abandoned as planned.
Mr Neaves said while it was a disappointing result, Finder had a high quality and valuable portfolio of drill ready prospects in both the North West Shelf and North Sea, and remained confident that its portfolio would deliver a material discovery.
He said the company’s farm-out strategy ensured that it had minimal financial exposure in Kanga-1, with its well contributions capped at $US940,000
“Finder remains in a strong financial position and is fully funded to execute our work programs and deliver on our strategy over the next few years,” he said.
“Our focus now turns to farm-outs across our broad portfolio to fund future wells with industry partners, ensuring our existing shareholders are highly leveraged to drilling success.”
Finder joined the boards of the ASX last month after a $15 million initial public offering and 17 years of success operating as a private company.
Until recently, the company has targeted big oil prospects on the North West Shelf, completing preliminary exploration work and partnering with bigger players to fund drilling.
The company has completed 25 farm-outs and divestments with the likes of Woodside, Shell, OMV and Hess, over its 17-year history.
But Finder’s low-profile founders and owners, Norway-born Jan Ostby and Odd Larsen, decided to take the company public to help fund their growing ambitions in the sector.
Oil and gas exploration floats have been thin on the ground in recent years because of soft prices and investor preference for clean-energy stocks over fossil-fuel plays.
But with the re-emergence of the global economy following the COVID-19 pandemic and the Russian invasion of Ukraine, oil prices are up, energy security is front of mind and investors are re-engaging with the sector.