Shares in Desire Petroleum, the Aim-quoted oil explorer, fell by almost a quarter after it announced that no oil had been found in a prospective well off the Falkland Islands.
Shares dropped by 26.7 per cent, or 12¾p, to 35p after the company said it had found no oil in its Dawn well in the North Falkland basin.
Desire has now drilled four wells in the North Falklands basin without finding oil and said it had funds to drill one more.
Last week, the shares dipped by nearly a third after it announced that no oil had been found at its Jacinta prospect in the same well as Dawn.
The company said that a return to the market for capital was being considered but that Desire, which has £60m ($94m) in funds, had “no imminent plans” to do so.
“Obviously it is something of consideration, though we will wait until the results of the next well,” it said.
In September, Desire raised £22.8m in a share placement for a potential drilling programme close to where rival Rockhopper made its estimated 170m barrel Sea Lion discovery.
That remains the only oil find in the region since four London-listed oil companies that operate there – Rockhopper, Desire, Falkland Oil & Gas and Borders & Southern – raised £250m from investors last year to drill for oil in the area for the first time since 1998.
The drilling campaign has been criticised by Argentina, which went to war with Britain in 1982 over the islands, as a violation of its territorial sovereignty.
Desire’s shares have dropped from 168½p, a high they hit on October 11.
Peter Hitchens, an oil analyst at Panmure Gordon, said the remaining well could be Desire’s “last roll of the dice”.
“They’re running out of money and it will be difficult for them to raise more. We’re getting to the stage where there’s not much comfort zone left so the question is what will they go off and drill next?” he said.
In December, Desire’s management was fiercely criticised by investors after it issued a statement suggesting an oil find based on “preliminary data”, only to announce a few days later that the well was a dud.
The company said that it would now be reviewing its data after four months of drilling.
“We are yet to decide the location of where we will drill next, but the rig and funding are in place for the next well,” Desire added.