Falkland energy explorer’s shares tumble on disappointing drilling update

Falkland explorer’s shares fall on drilling update

LONDON — The energy exploration company probing for oil north of the disputed Falkland Islands said Monday that the reservoir it was trying to exploit was of low quality — an announcement that quickly led to a drop in the company’s share price.

Desire Petroleum PLC’s decision to start drilling a well about 60 miles (100 kilometers) miles off the South Atlantic archipelago angered Argentina, which claims the islands as its own and contests Britain’s right to exploit what could be a vast field of energy reserves beneath their waters.

But Monday, Desire Petroleum said that preliminary results from its drilling had shown that while oil might be present, it was only in “thin intervals.” The company said more testing would have to be done before it could decide whether the well should be drilled deeper or abandoned.

“Operations are expected to be completed later this week when a full announcement will be made,” the company said in a statement.

The company’s share price fell 48 percent on the London Stock Exchange Monday morning to 52 pence ($0.78).