Kosmos Energy Stock Dips As Hippocampe-1 Well Did Not Encounter Oil Or Gas

(RTTNews) - Shares of Kosmos Energy Ltd. (KOS) declined around 4 percent in the extended trading on Monday after the independent oil and gas exploration and production company that the Hippocampe-1 exploration well did not encounter oil or gas.

Kosmos said it has completed drilling the Hippocampe-1 exploration well located in Block C-8 offshore Mauritania in approximately 2,600 meters of water.

Designed to test Lower Cenomanian and Albian reservoirs charged from the deeper Valanginian - Neocomian source, the Hippocampe-1 well was drilled to a total depth of 5,500 meters. Well-developed reservoirs were encountered in both exploration targets but these proved to be water bearing.

The company said the well will now be plugged and abandoned. It is believed that this prospect failed due to a lack of charge access in this part of the play fairway.

Andrew Inglis, chairman and chief executive officer, said, "Following on from our Yaakar discovery earlier this year, Hippocampe-1 is the second of four tests of independent prospects located in the outboard basin floor fan fairways in our Mauritania and Senegal acreage. Although the well did not encounter oil or gas, it has, together with Yaakar, confirmed the presence of quality cretaceous reservoir in the outboard basin floor fans, which contain multiple leads and prospects, more than 200 kilometers from the north to south through our blocks."

The company said that it is still in the early stages of opening this newly emerging basin and its forward drilling program remains unchanged given the independent nature of the prospect tests, in particular with regard to charge.

The Ensco DS 12 drillship will now proceed as planned to Block C-12 offshore Mauritania to test the independent Lamantin oil prospect. The prospect comprises Campanian age reservoirs charged from the shallow, immediately underlying, oil prone, oil mature Albian and Cenomanian-Turonian source rocks.

Kosmos holds rights in the C-6, C-8, C-12, C-13, and C-18 contract areas under production sharing contracts with the Government of Mauritania's Société Mauritanienne Des Hydrocarbures et de Patrimoine Minier or SMHPM.

Kosmos is the exploration operator of Block C-8 with 28 percent equity and is joined by its partners BP Plc with 62 percent and SMHPM with 10 percent.

In the after hours trading on the NYSE, Kosmos shares dropped 3.7 percent to $7.55.