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UPDATE 1-Niko's dry-well run hurting output growth plans

Source : REUTERS
Last Updated: Thu, Nov 08, 2012 10:30 hrs

* Maestro-1 well in Trinidad turns out dry

* Shares fall as much as 9 percent

Nov 6 (Reuters) - Oil and gas producer Niko Resources Ltd said yet another well in Trinidad came up dry, hurting the company's plans to raise output outside of India where it is grappling with falling volumes.

Niko's shares fell as much as 9 percent to C$11.26 in morning trading on the Toronto Stock Exchange.

Calgary, Alberta-based Niko said it did not find oil or gas in commercial quantity in the Maestro-1 well located offshore Trinidad in Block 2ab.

Maestro-1 is Niko's fifth unsuccessful well in Trinidad, where its partners include British utility Centrica Plc.

"We had anticipated it (Maestro well) being a failure simply because of my modeling of the region geologically," said Christopher Brown, an analyst at Canaccord Genuity. "I think it is off the main regional geology opportunity."

Niko and partner ENI SpA in September abandoned a well in Indonesia. Niko also operates in Bangladesh, Pakistan, Madagascar and the Kurdistan region of Iraq.

"We are more bullish on the Indonesia program for success and we don't look to Trinidad to add any incremental value to Niko's share price," Brown said.

The company's stock has lost more than three quarters of its value this year.

Niko cut its production forecast for the full year by about 4 percent last month due to mechanical issues at one of its blocks in Bangladesh. Niko holds interests in production-sharing contracts on 22 offshore blocks in Indonesia.

The company has posted losses for the last five quarters, mainly on falling gas output from India's D6 block, in which it has a 10 percent stake. Partner Reliance Industries last week cut its estimate of gas reserves in the block off India's east coast by about two-thirds.




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