Shares in UK oil explorer Borders & Southern Petroleum (Other OTC: BDRSF.PK - news) have plunged more than 70pc after the company reported disappointing results from its latest Falkland Islands well.

The company revealed in a statement on Monday morning that it had found found evidence of gas in the Stebbing well but not in quantities that were likely to be commercial.

Technical difficulties meant the well did not reach lower targets, a result it called "disappointing".

Borders & Southern's disappointment follows the company's initial success when its first well, also drilled south of the islands, found gas condensate, a liquid which often trades at a premium to crude oil.

Oil exploration by British companies off the Falklands is irritating old wounds with Argentina and tensions between it and Britain have been risen this year, the 30th anniversary of the war the two fought over the islands.

The British government tabled a White Paper last month officially pledging to defend the Falkland Islands and declared there would be "no weakening" in the country's resolve.

The Falklands look set to be transformed into a new oil producing region following an oil discovery made by another British firm, Rockhopper Exploration , two years ago off the north coast of the islands. Rockhopper signed a $1bn deal with Premier Oil (LSE: PMO.L - news) last Thursday to help fund the development of the oil field.

Borders & Southern, which is listed on the AIM index, is leading the charge to find oil off the south coast of the islands. The Stebbing well will now be plugged and abandoned, with the rig being assigned to Falkand Oil & Gas (Euronext: IXSOG.NX - news) .

The shares fell 44.25 - 71.1pc - to 18p in early trading.

Meanwhile, Tullow Oil (Stuttgart: 591219 - news) shares fell 1.3pc after the company revealed drilling operations in the Georgetown Block, Guyana, have ended "and the well will be plugged and abandoned at a depth of 4,876 metres, without reaching the primary objective".

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Borders & Southern Petroleum shares plunge 70pc after Falkland Islands well disappoints