23rd May 2014 07:51
LONDON (Alliance News) - Tullow Oil PLC saw its shares fall Friday after it said a well it was drilling in a potential oil field in Ethiopia had hit water bearing reservoirs.
In a statement, the company said it would now move the rig to drill a new exploration well in a completely separate sub-basin at the South Omo block in Ethiopia. It will drill the Gardim-1 wildcat exploration well in the south-eastern corner of the Chew Bahir basin.
"Shimela-1 in the South Omo Block, onshore Ethiopia, was drilled to test a prospect in a north-western sub-basin of the vast Chew Bahir basin. The frontier wildcat well encountered lacustrine and volcanic rocks including almost 100 metres of net sandstone reservoir within siltstones and claystones. Trace thermogenic gas shows were recorded at 1,900 metres," said Tullow, which is the operator of the block and has a 50% equity stake.
Africa Oil Corporation has a 30% stake in the block, while Marathon Oil Corp owns 20%.
"Although the Shimela well only found traces of thermogenic gas, it has provided key data to continue to build our understanding of the north-western part of the Chew Bahir basin. 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," Tullow Exploration Director Angus McCoss said.
Tullow is trying to find out whether oil resources it found in Kenya in 2012, the first oil discovery made in that country, extend into neighbouring Ethiopia. Late last year, it abandoned another well on the South Omo block after it proved to be dry.
However, it says over 120 leads and prospects have already been identified on seismic across Tullow?s Kenya-Ethiopia acreage.
Still, Tullow shares were down 1.3% at 840.1935 pence early Friday, one of the biggest falls on the FTSE 100.
By Steve McGrath; [email protected]; @SteveMcGrath1
Copyright 2014 Alliance News Limited. All Rights Reserved.
Related Shares:
Tullow Oil