Nov 15 Vast Exploration Inc said it will abandon the Qara Dagh block in the Kurdistan region in Iraq along with Niko Resources Ltd after drilling at one of the wells showed no commercial viability, sending Vast's shares down to a life low.
Vast Exploration holds a 37 percent interest in the block, its only asset. Niko is the operator of the block. Groundstar Resources is the third partner.
Vast Exploration, which acquired a working interest in the block in 2009, expects to recover $3.25 million from the Kurdistan regional government within the next year.
The oil and gas company, which named Sam Yik as chief financial officer, said an attempt to find a suitable farm-in partner failed.
This is the latest setback for Niko. The company has abandoned wells in Indonesia and Trinidad, cut its full-year production forecast due to mechanical issues at one of its blocks in Bangladesh. It is also dealing with declining volumes in India.
Niko's partner Reliance Industries Ltd cut its estimate of gas reserves in the Krishna Godavari (KG) D6 block off India's east coast by about two-thirds to 3.4 trillion cubic feet (tcf) earlier this month.
Shares of Vast Exploration, which has a market value of about C$4 million as of Wednesday close, were trading at 0.5 Canadian cents on the Toronto Venture Exchange. Niko's shares were down 3 percent at C$9.55 on the Toronto Stock Exchange.