Kazakhstan oil explorer Max Petroleum’s shares halved in value today after it warned it may have to “significantly curtail” its planned drilling programme.
The warning came after the drill on one of its major prospects — NUR 1 — twice became stuck in salt deposits. The first time, at a depth 5718 metres, forced the company to drill around the side of the stuck drilling tools. The second occasion, earlier this week, saw the new drill pipe stuck at 5722 metres when it hit unusually high pressures in the salt levels.
Max said that it was trying to free the latest drill by dissolving the salt with fresh water and then using higher density mud to counter the pressure build-up.
The cost of the well has risen by $10 million to $43 million (£27 million), which has forced Max to start talks with its major lender Macquarie Bank about raising extra capital.
It said it held talks with a number of potential providers of debt or equity but these had been hampered by current financial market conditions.
The company said that it had drawn down $54.2 million of its existing borrowing facility of $58 million which runs until the end of this month. It added that Macquarie Bank will review this facility at that point. Max shares slumped by 4.65p to 4p.
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