Business

Saturday 21 October 2017

Tullow Oil shares suffer as it reports dry wells

Tullow Oil Chief Executive Officer Aidan Heavey
Tullow Oil Chief Executive Officer Aidan Heavey
Peter Flanagan

Peter Flanagan

SHARES in Tullow Oil plunged this morning after the company said wells it was drilling in Mozambique and French Guiana had failed.

In a statement, the Irish led firm said the Cachlote-1 well exploration well offshore Mozambique had found gas but the well was not commercially viable. A deeper target on the same site did not find any gas or oil.

That well was then sidetracked but, again, what gas was found was deemed not worth pursuing. The well has now been abandoned.

Tullow experienced a similar story in French Guiana, where the GM-ES-4 well was drilled into the Cebus prospect. Despite drilling to a depth of 6,292 metres, Tullow said they did not find any sign of hydrocarbons, and that well too has been plugged and abandoned.

Tullow exploration director Angus McCoss said the data from the Cachalote-1 in Mozambique was “encouraging although this is not a standalone commercial discovery”.

“The potential for discovering oil in this region remains after we encountered wet gas shows in the deeper sidetrack. We will integrate this valuable data into our regional model to improve our chances of unlocking the oil play potential offshore Mozambique,” he added.

By 11.20 Tullow was down 7.3pc in London at 1033 pence.

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