Tullow Oil (TLW)
fell 1.4% on Friday to 840p after announcing that the Shimela-1 well,onshore
Ethiopia, had encountered water bearing reservoirs and only traces of
thermogenic gas shows were recorded after drilling to a final depth of 1,940
metres. This well, situated in the South Omo basin, near Chew Bahir and named
after a common bird in the area, was considered particularly significant for
the company's prospects. As recently as April a report identified the Shimela
prospect as the first well in the area, adding that a second well location was
also being considered for 2014. Previously, Tullow drilled the Sabisa-1 and
Tuletule-1 in the South Omo Block, but while oil and gas shows were recorded in
the first well, the second well was abandoned as a dry hole. Tullow has
suffered a string of disappointing exploration results, announcing in April
that the Mauritanian Tapendar-1 exploration well, in Block C-10, did not
encounter hydrocarbons and has been plugged and abandoned, and in March
declaring Force Majeure on its exploration licence in Guinea which delayed the
drilling of the Fatala well, previously scheduled to commence in April 2014. The
Shimela-1 well rig will now be moved to drill the Gardim-1 wildcat exploration
well in a completely separate sub-basin, in the south-eastern corner of the
Chew Bahir basin. Tullow operates the South Omo block with a 50% equity
interest with Africa Oil taking a 30% stake andMarathon Oil (MRO)
another 20%. "The prospectivity at the Gardim-1 well, which is targeting
an independent petroleum system in a separate south-eastern sub-basin, is not
affected by this result," said Angus McCoss, exploration director at
Tullow Oil. The stock enjoys a lot of support at 750p, highlighted 'Guesstimate'
on the Interactive Investor discussion board. The shares were as
high as 1,130p last July. Source (Interactive Investor)
Sunday, May 25, 2014
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