Vast Exploration Inc. (CVE:VST) (PINK:VSTFF) collapsed after traders evaluated the latest technical update on the key property of the company.
VST lost half of its market value on Monday after the company provided a drilling update for their prime property. The stock price gapped down and closed the session with a 53% loss on a trading volume of 9.7 million shares, which was 12 times higher than the average activity. Further decline is possible because of the effect of fundamental news.
On July 11, 2011 Vast provided an update on Qara Dagh Block in Iraq. The company said that one well, drilled to a depth of 3,908 meters, managed to sustain production rate of 550 barrels of oil and 800 mscf of gas per day, but the rates weren’t sustained for the entire duration of the test.
The data acquired shows the well could have reached into oil reservoir. There are discussions in place on whether to deepen the well another 250 meters to further test the production potential of the formation.
Share price had previously run up on the announcement of upcoming well tests and traders clearly had higher expectations for the project.
Qara Dagh Block is the principal asset of Vast and the company holds a 37% working interest in the property. The block is in line with existing discoveries on Zagros Fold Belt of Northern Iraq.
