JED Oil Inc. (JDO)

Last Trade:
4.40
Trade Time:
12:11PM ET
Change: -0.90
down (16.98%)

Shares of JED Oil Inc. lost more than half their market value and fell to an all-time low on Tuesday after the oil and gas company said it suspended drilling in the Ferrier and the Pinedale areas, mainly due to a decline in natural gas prices.

JED shares fell $5.47 to close at $5.30 on the American Stock Exchange, their biggest percentage fall since April 2004. Tuesday's fall saw the stock price slide below its initial public offer price of $5.50 per share for the first time.

The fall in the JED stock also dragged down JMG Exploration Inc. shares by about 49.2 percent to close at $3.50 on the NYSE Arca, after touching an year-low of $2.70.

JED is pursuing a merger with JMG Exploration, in which JMG would merge with a wholly owned subsidiary of JED in the U.S.

JED, which develops and operates oil and natural gas properties principally in western Canada and the U.S., said it encountered unexpected water production during drilling in Pinedale and is continuing to investigate the problem.

The company also said it expects to exit the year at a production rate similar to its third-quarter exit rate of 2,001 barrels of oil equivalent per day.

It had recently acquired 100 percent of Enterra Energy Trust's working interest in the North Ferrier area and about 57.5 percent of Enterra's interest in the East Ferrier area as part of an asset swap agreement.

JED and JMG had also recently received approval to increase the well density on JED's lands in the Pinedale/Jonah area of Wyoming.

JED said it will revamp its budget and return to natural gas drilling later this year or early next year, when the price of natural gas is expected to increase during the heating season.