Tullow Oil’s shares on the London Stock Exchange rose by more than 3 percent hours (16 Mar 12:36 PM GMT) after the Africa-focused explorer reported “strong oil shows” from a test well in a largely untapped Kerio basin in northern Kenya.
“This is the most significant well result to date in Kenya outside the South Lokichar basin. Encountering strong oil shows across such a large interval is very encouraging indeed,” says Angus McCoss, Tullow Oil’s Exploration Director.
“I am delighted by this wildcat well result and the team are already working on our follow-up exploration plans for the Kerio Valley Basin.”
Within an hour of the market opening on Wednesday, shares in Tullow Oil climbed to highs of 201p. However, they are still very far from reaching the 2014 highs of 906.5p that were reached before global oil prices fell by about 70 percent pushing companies across the sector to the brink of collapse. Tullow has, however, remained resolute in its exploration plans.
The company says the strong oil shows encountered in Cheptuket-1 indicate “the presence of an active petroleum system with significant oil generation”. It has started post-well analysis which will help it to define the future exploration programme in the basin.
Tullow Oil which has also made significant discoveries in Uganda and Ghana plans to begin oil production off the coast of the West African country later this year. The company’s Tweneboa-Enyenra-Ntomme (TEN) field off the coast of Ghana is expected to deliver its first oil this summer at and will produce 100,000 barrels of oil per day by 2017.
Tullow operates Block 12A with 40 percent equity and is partnered by Delonex Energy with 40 percent and Africa Oil Corporation with 20 percent. It is also working with partners Africa Oil and A.P. Moller-Maersk to develop finds in the South Lokichar Basin where reserves are estimated as 600 million barrels.