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(Reuters) - Horn Petroleum Corp has suspended drilling at its Shabeel well in Somalia's Puntland and said it will move the drilling rig away from the area before reaching the planned depth of 3800 meters.
The well in the Dharoor valley hit a metamorphic basement at a depth of 3,430 meters, Horn Petroleum said in a statement on Thursday. Basement is the rock layer below which economic oil or natural gas reservoirs are unlikely to be found.
Horn Petroleum's shares more than halved to 77 Canadian cents on Thursday on the Toronto Venture Exchange.
The rig used to drill the Shabeel well will now be moved 3.5 kilometers north of the current location, the company said.
The well, whic3h earlier hit a 12 to 20 meter hydrocarbon pay, a measure of a reservoir's thickness, could hold up to 3 meters of additional potential hydrocarbon pay at a depth of 3,246 to 3,430 meters.
"They (the latest hydrocarbon pay) are not considered to warrant testing at this time...," Horn Petroleum said.
Canada's Africa Oil Corp owns a 51 percent stake in Horn Petroleum, which holds a 60 percent working interest in the Dharoor and Nugaal blocks in Puntland -- a semi-autonomous region in the northeast of Somalia.
Africa Oil began drilling an exploratory well in Puntland region in January, the first to do so in the country since civil war erupted two decades ago.
Somalia, mired in conflict since warlords and Islamist militants reduced the government to impotence, represents one of the final frontiers in Africa to be explored. The country has no proven hydrocarbon reserves.
Horn Petroleum's other partners in the Dharoor and Nugaal blocks are Australia's Range Resources Ltd and Red Emperor Resources.
Africa Oil shares fell as much as 8 percent to C$6.70 on the Toronto Venture Exchange.