PERTH (Dow Jones)--Karoon Gas Australia Ltd. (KAR.AU) said Thursday that the inconclusive initial results from its Poseidon-2 natural gas well, offshore Western Australia, may have been caused by a technical glitch.
"Potentially, it's mechanical failure, but work is continuing to determine the cause of the problem," said Scott Hosking, Karoon's company secretary.
The partners hope to come up with a "more definitive result next week," once more tests are carried out on the well, Hosking told Dow Jones Newswires.
Earlier, shares in Karoon fell 24% to close at A$8.00 after the company stated some initial tests on Poseidon-2 were "inconclusive".
"Initial shut-in and build-up periods during the well testing phase have been inconclusive," it said.
Karoon owns 40% of the WA-398-P permit where the Poseidon-2 exploration well was drilled, with the remaining interest held by U.S. oil and gas producer ConocoPhillips (COP).
Poseidon-2 is the first of between four and six appraisal wells planned on the gas discovery, which lies close to Woodside Petroleum Ltd.'s (WPL.AU) offshore Browse field.
-By Stephen Bell, contributing to Dow Jones Newswires; 61-8-9244-4243; [email protected]
KAR Price at posting:
$8.00 Sentiment: None Disclosure: Held
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