When the first negative results of Horn Petroleum’s drilling and testing of Puntland well in Somalia were made public, it was disappointing however there was some hope of yielding desirable results upon further drilling. Now that the exploration has drilled more than 3500 meters and several tests have been conducted, it can be ascertained that the Puntland well or the drilled sections of the Jesomma Formation has no traces of oil.
The first DST (Drill Stem Test) revealed fresh water and wet sand and the negative results were published on 23rd July 2012. Almost instantaneously, (TSX: VENTURE. HRN) witnessed a drastic crash of the stock prices. In an intraday session, (TSX: VENTURE. HRN) stock prices crashed down by as much as 46%. The value of a share was a disappointing 83 cents at closing of the markets and an astonishing 3.5 million shares were traded out.
If the crash of (TSX VENTURE:HRN)and the overall negative outlook was not making things worse, Horn Petroleum had been consistently failing to offer any positive outlook on its entire exploration at the Jurassic Rift Basin. The gas and oil shows that had prompted the launch of an extensive hunt for oil wells in the Shabeel North Area of Somalia, has thus far offered no specific indications.
An official press release from Horn Petroleum dated 26th July had indicated their hopes of finding favourable trapping geometries at the lower zones of the Shabeel North well but unfortunately there have been no confirmations. Although the CEO, David Grellman had stated that their observations and projections of the two Jesomma structures being drilled would be subject to petrophysical analysis but with no positive developments, one is left to wonder if the tests were conducted and offered disappointing results.
It’s a tough time ahead forHorn Petroleum Corporationnot only with the prospects of (TSX: VENTURE. HRN) but also with its partners, Range Resources and Red Emperor, the two companies holding 20% each of working interest. Trade analysts also foresee the disappointing results to cause problems amongst Horn Petroleum’s equity partners, a major one being Africa Oil Corp.
With quarterly results that are far from encouraging, consistent failures in finding sustainable and extractable oil wells in Puntland and the crash of stock prices on the (TSX: VENTURE. HRN) , the prospects are bleak for Horn Petroleum and there is a need to have a miraculous turnaround from here to catapult the company to where it desires to be.
For more information, visit the website athttps://www.hornpetroleum.com/