ENTERPRISE Oil is plugging and abandoning its second test well off the west coast of Ireland after mechanical problems, the company said in a statement. The collapse of casing in the well off the Mayo coast prevented Enterprise from carrying out tests to establish gas flow from the well.

"We are disappointed but it is not practicable to carry on," a company spokesman said. "This does not mean the end of our interest in the area," he insisted. Data gathered from the drilling would now be analysed and the results reviewed before any decisions would be made, he said.

It was too early to say whether the company would have to raise funds to continue its exploration programme in the Slyne Trough the spokesman said. Some measure of risk was always taken into account in exploration budgeting he added. Gas shows described by the company as "encouraging had been found at the well, some 70 kilometres west of Belmullet in water 352 metres deep.

However, commercial success will depend on the size of the deposit, the speed of the flow and how easily any gas could be brought to shore. Enterprise was testing two wells in the Slyne Trough. The first well was plugged and abandoned after gas shows were found. The company is currently analysing its findings. The second well - the 18/20-1 - was drilled with the Petrolia semi submersible drilling rig.

Enterprise is exploring the wells in partnership with Santa Fe (40 per cent) and Statoil (15 per cent).

Recently the Enterprise Atlantic area manager, Mr John McGoldrick, pointed out the difficulties involved in finding a commercially viable gas field.

"Finding a commercial field is a long and treacherous path. If the well testing operation is successful we can try and go somewhere, but if it isn't, it's back to the drawing board."