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Ithaca Energy: Handcross well fails to find hydrocarbons

Last updated: 03:24 12 Feb 2014 EST, First published: 04:24 12 Feb 2014 EST

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Ithaca Energy (LON:IAE) will plug and abandon the Handcross exploration well after it failed to find any hydrocarbons.

Handcross was one of the programmes that originated from the Valiant Petroleum project pipeline.

The company was the operator, with a 25% stake in the project, though its share of the drill costs is being ‘carried’ by other partners.

Ashley Kelty, analyst at broker Cenkos, looked on the bright side; in a note he said: “Whilst the result of any dry hole is disappointing, it is important to recognise that this was not a well that Ithaca would have been likely to drill were it not committed at the time of the Valiant acquisition.”

“The potential was significant (at 200mmboe gross), but due to the high risk nature was only estimated to be worth 4p on a risked basis.”

Cenkos retains its ‘buy’ recommendation on the junior North Sea oil stock and is of the view that Ithaca “offers an attractive entry point to the E&P sector”. The broker has a 200p price target.

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