Tullow share price dips as Kenya exploration in focus
Tullow Oil Plc (LON:TLW) shares opened 1.1 percent lower at 318.30p today, after the company reported results from its exploration and appraisal activities in Kenya, which revealed overall positive news from the rigs.
The London-based company is exploring three blocks in Kenya – Block 10BA in the North Turkana Basin, and Blocks 10BB and 13T in the South Lokichar Basin.
The Engomo-1 exploration well in 10BA encountered “no significant oil or gas shows” and the well has been plugged and abandoned. Activities will now turn to high-grading the remaining prospectivity in the basin, where “numerous oil slicks and seeps have been observed”, the company said.
Meanwhile, appraisal wells in Blocks 10BB and 13T showed encouraging results, with the extended well test (EWT) in the Amosing oil field demonstrating high quality reservoir sands and good natural flow pressure.
The Ngamia oil field also brought back good news, with the eastern flank of the field extended by about a mile and the appraisal well encountering 132 metres of net oil pay, out of 2,914 metres final depth.
“Whilst we would have hoped for basin opening success in the North Turkana Basin, we still have a vast amount of undrilled acreage with … significant remaining exploration potential,” exploration director Angus McCoss said. “Further good news from our appraisal programme in Northern Kenya, and the promising initial flows from the Amosing oil field extended well test, give us further confidence in the size and scale of our two cornerstone fields for the development of the South Lokichar Basin.”
Tullow Oil has been struggling against diminishing investor confidence lately, with the company’s stock losing 20 percent over the past two weeks and its position in the FTSE-100 index under threat.
The share price fall follows disappointing results posted a month ago in the company’s 2014 annual report. Revenue declined by 16.4 percent to $2.213 billion as compared to 2013, while operations generated a loss of $1.965 billion from a $0.381 billion profit a year earlier.
As of March 7, the consensus among 35 investment analysts polled by the Financial Times has it that investors should hold their position in the company.
As of 08:36 GMT, Wednesday, 11 March, Tullow Oil plc share price is 320.55p.