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Niko Resources abandons Candralila-1 well on mechanical problems

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Canadian natural gas and oil explorer Niko Resources Ltd. (TSE:NKO) reported Monday it abandoned the Candralila-1 well without reaching target depths due to mechanical problems.

Shares fell by 6.86 percent to $23.75 each on the Toronto Stock Exchange.

The  Indonesian well had oil and gas shows while drilling and partial logs recovered indicated potential prospectivity. Information from the Ratnadewi-1 well will assist in determining prospectivity for Candralila-1.

Niko said the Hercules 208 off-shore rig was moved to the Ratnadewi-1 prospect from Candralila-1 from the Lhokseumawe block.

The Discoverer Seven Seas deepwater rig is now slated to start drilling the Lebah prospect in the North Ganal block in Indonesia in August after the completion of its current drilling location.

Last month, the natural gas explorer said it had relinquished its stake in the D4 block due to a geological assessment and the current commercial environment in India.

Niko has a 15 percent interest in the D4 Block which is located in the Mahanadi Basin offshore from the east coast of India. Spread over 17,000 square kilometres, the block is in the exploration phase.

The company said its decision resulted from the most current geological assessment related to the size and risk of trapping mechanism.

The Calgary-based energy explorer has operations in India, Indonesia, Kurdistan Iraq, Madagascar and Trinidad.

Quick facts: Niko Resources Ltd.

Price: - CAD

TSX:NKO
Market: TSX
Market Cap: -
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