Niko reports another dry well in Indonesia, shares plunge
(Reuters) - Oil and gas producer Niko Resources Ltd (NKO.TO) said another one of its offshore wells in Indonesia came up dry, sending its shares down as much as 25 percent.
BMO Capital Markets analyst Jared Dziuba said the latest well is the fourth one to turn up dry in its 2013 Indonesian program.
"Aside from a lack of exploration success to-date, funding concerns continue to weigh on the company, particularly ahead of a convertible note repayment in December," Dziuba added.
Earlier this week, Niko reported a dry well in Trinidad, hurting the company's plans to raise output outside India where it is grappling with falling volumes.
Niko and partner ENI SpA (ENI.MI) abandoned another Indonesian well in September.
The Canadian company started an extensive drilling program in September in Indonesia where it has production-sharing contracts on 22 offshore blocks.
"This dry well was very disappointing and will lead to downward pressure on the share price for the foreseeable future," Cannacord Genuity analyst Christopher Brown said.
Shares of the Calgary, Alberta-based company were down 16 percent at C$9.95 in early trade on the Toronto Stock Exchange on Friday. As of Thursday, they had lost about 79 percent of their value in the preceding 12 months.
Niko said it now plans to begin drilling the Ajek-1 well in the West Papua region of eastern Indonesia.
The company also operates in Bangladesh, Pakistan, Madagascar and the Kurdistan region of Iraq. (Reporting by Maneesha Tiwari and Ankur Bannerjee in Bangalore; Editing by Joyjeet Das and Sreejiraj Eluvangal)