LONDON (ShareCast) - Shares in Tower Resources plunged on Friday after the oil and gas group's subsidiary, Neptune Petroleum, revealed that no hydrocarbons were encountered while drilling the Welwitschia-1A well.

Drilling on Welwitschia-1A, which is located offshore Namibia, has been behind schedule following both the late delivery of the rig and operational issues.

Costs of drilling the block are expected to be around 10% greater than the original $91m anticipated.

The cost of drilling 1A to deeper targets has been estimated at an additional $40m.

"Despite our interest in the deeper targets, with their large potential resources, this raises the question whether it may be better to wait for the full analysis of the current well before deciding whether and where to drill a second well and test the deeper targets with the benefit of that further information," Tower Resources explained.

"As a result, the partners have agreed not to drill further at this time and to evaluate the information and its implications for the block. The well is being plugged and abandoned."

The group said that although disappointed, it would reconsider its options once more detailed analysis had been received.

NR

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