InterOil Shares Plunge On Problematic Drilling Results

InterOil Corp. (IOC) shares plummeted more than 25% Wednesday morning after the company announced before the opening day bell disappointing drilling results from its Elk-2 well operations. The company's latest drilling results uncovered tight rock at the site, which in other words, means the likelihood of flowing gas coming from the reservoir is probably a pipe-dream.

The stock was down almost 50% since Tuesday, as investors began trading down the stock as early as that afternoon, before the Interoil press release.

Measuredmarkets' analysis showed deviant behavior in InterOil trading on Tuesday, when volumes and number of trades on the TSX and AMEX exchanges spiked.

Combined volume was more than 6.4 million shares, which compares to a recent high of 939,586 on June 6, 2007. Meanwhile the number of trades hit 22,159, versus 4,041 also on June 6. The chart below shows a total of 19 flags (3 price, 8 volume, 8 trade) for Interoil trading on Wednesday.