Desire Petroleum Oil Exploration in Falkland Island

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Desire Petroleum fails ti find oil and gas off Falkland Island then slumped in London trading, where exploration has provoked a diplomatic row between the U.K. and Argentina.

Desire Petroleum Plc tumbled as much as 46 pence, or 42 percent, to 63.75 pence, the biggest drop since March 29. It was down 25 percent at 82.75 pence at 10:07 a.m. London time. The 14/15-1 well on the Rachel prospect was drilled to a depth of 2,877 meters (9,439 feet) and “no hydrocarbons have been found,” the U.K. company said today in a statement.

Shares in companies involved in Falkland exploration including Borders & Southern Petroleum Plc and Argos Resources Ltd. fell for a third day after Rockhopper Exploration Plc cited its advisers as saying that resources may be lower than expected in the offshore basin.

Borders dropped 3 percent to 64 pence in London trading; Rockhopper fell 4 percent to 326.75 pence; Falkland Oil & Gas Ltd. declined 5.2 percent to 108.5 pence; Argos plunged 9 percent to 40.5 pence. The 153-member MSCI ACWI ex Australia/Energy Index slipped 0.1 percent.

Last month, Desire raised about 22.8 million pounds ($36.6 million) after selling 16.3 million shares at 140 pence each to help fund its exploration campaign.

Rockhopper holds a 7.5 percent stake in the Rachel well, it said today in a separate statement. Desire plans to drill a sidetrack well into the deeper sandstones “closer to the mature oil source rock” to “evaluate the prospectivity,” the companies said.