Last week investors in oil and gas exploration plays 88 Energy (88E:AIM), Red Emperor Resources (RMP:AIM) and Pantheon Resources (PNR:AIM) were excited by the prospect of a big new discovery in Alaska.

Seven days later and their hopes are in tatters as more detailed results from the Winx-1 well show it has definitively not made a commercial oil find. Pantheon dives 27.7% to 20.5p, 88 Energy falls 37.7% to 0.82p and Red Emperor plunges 84.2% to 0.8p. The episode really shows the risks of oil exploration in microcosm.

Zones thought to have oil potential do not now warrant further testing. In something of an understatement, 88 Energy chief executive Dave Wall says: ‘We appreciate that this is disappointing for investors but, at the same time, we look to the future and continue our forward path to ultimate success at our projects in Alaska.’

Broker Cantor Fitzgerald comments: ‘Focus will now shift to the proposed farm-out of the Icewine conventional portfolio for 88 Energy, where a deal is targeted this quarter, and testing of the 2015 Alkaid well for Pantheon.

‘A disappointing result after promising early signs during drilling - likely to be a rough morning’s trading for the joint venture.’

The outcome for 88 Energy and Pantheon is less dramatic as they still have other assets to go after in the near term, but Red Emperor’s fortunes were more closely tied to this single well with its only other asset in the Philippines beset by frustrating delays.

Issue Date: 13 Mar 2019