Hungarian oil and gas firm MOL said on Friday it is still testing for gas at the Foldeak-1 well in its Mako Trough deposit, meaning suggestions the tests have failed are premature.
Canada's Falcon Oil, part-owner of the Mako project, said on Thursday it received notice of a recommendation from Exxon Mobil's Hungarian affiliate to cease operations at the well due to weak results.
We consider Falcon's announcement premature since the testing of the Foldeak-1 well and the evaluation of the test results are ongoing, MOL spokeswoman Dora Somlyai said.
Exxon Mobil and MOL each control 40.44 percent of the Mako Trough while Falcon Oil holds 19.12 percent.
MOL earlier said that the Mako Trough is believed to contain more than 340 billion cubic meters of unconventional natural gas, which is too hot and too deep for extraction using conventional technology.
MOL said late last year that three test drills were under way in the Mako Trough.
At 1132 GMT, MOL shares were down 1.3 percent at 14,750 forints ($80.43), up from earlier lows.
Analysts said even in case of failure, the impact on MOL should be relatively minor.
Most of the cash for the drilling was put up by Exxon so the financial impact would be on Exxon and not MOL, ING oil sector analyst Tamas Pletser said. There was a slight premium built into the stock price for the success of the drilling and that's getting priced out now.
KBC oil sector analyst Peter Tordai said that the negative reaction on MOL's share price should be around 1 to 2 percent.
(Reporting by Balazs Koranyi; editing by John Stonestreet)