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Tuesday, 02 December, 2008, 22:10 GMT | more >>

AED stock falls as Puffin slips



By Upstream staff 

Australia’s AED Oil has seen its stock price plunge after the company said oil production at its 100%-owned Puffin North East field in the Timor Sea would fall below original expectations due to technical problems.

AED said at its Annual General Meeting yesterday that the field was now expected to produce at 20,000 barrels of oil per day once commissioning is completed, down from the original prediction of 30,000 bpd.

The company said the field had been producing water earlier than expected, stretching the project's handling systems.

AED also said it had suspended development of the $200 million Puffin South West field pending further studies, saying the area was more geologically complex than first thought.

In a statement released today, the company maintained that the commissioning issues constraining production rates were short-term, adding that the occurrence of water at Puffin NE was normal and in the range of production scenarios anticipated.

The statement also said that appraisal of the Puffin SW field was continuing through its drilling programme of Puffin-10 and that further development options were being evaluated.

However, the market was lesss confident, with AED's market value falling as much as 18% - or A$200 million (US$174.3 million) - on the news.

The company had seen its shares soar to a record A$11.40 on 17 October, following the start of production at the Puffin field.

AED managing director Ken Tregonning remained optimistic despite the share-price plunge.

"We actually didn't see it as much of a downgrade, but the market did. It's entirely possible we'll be doing 30,000 barrels a day from Puffin NE in May [after drilling another well]," he was quoted as saying by the Sydney Morning Herald.


Thursday, 22 November, 2007, 06:40 GMT  | last updated: Thursday, 22 November, 2007, 06:59 GMT

A bad day for Puffin: AED says production will be lower than expected
 

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