U.S. Oil & Gas PLC (USOIL) has told investors that the Eblana-9 well at Hot Creek Valley, in Nevada, did not encounter commercial hydrocarbons and is being plugged and abandoned.
The Eblana-9 well was drilled down to a depth of 5,250 feet, the company said.
It penetrated three potential zones, as targeted, and the company said whilst there was evidence of hydrocarbon migration above cap rock there was no evidence of migration in the targeted zones.
“We are extremely disappointed with the outcome of the Eblana-9 drill,” said chief executive Brian McDonnell in a statement. “However, we still believe there is a working oil system on our lease acreage in Hot Creek Valley.”
“Following the conclusion of operations, we will be closely analysing the data collected from the well before deciding on our future direction. Amongst the options considered will be a seismic study to assess prospects in the West Play carbonates, believed to be independent of the oil system in the East.
“While this is not the hoped-for outcome, our efficient drilling and careful risk management successfully contained cost and resulted in low financial exposure,” he added.
The company said that net expenditure on the well is expected to be approximately US$670,000.