Tullow Oil has encountered approximately four metres of net oil pay at its Carapa-1 exploration well, drilled on the Kanuku licence offshore Guyana.
This is lower than its pre-drill forecast.
In early trading shares in Tullow Oil - which in 2019 had a very difficult year - are down almost 7pc.
Preliminary results of drilling, wireline logging, pressure testing and sampling of reservoir fluid indicate the discovery of oil in Upper Cretaceous age sandstone reservoirs.
Rig site testing has indicated that the oil has a sulphur content of less than 1pc.
Mark MacFarlane, chief operating officer at Tullow Oil, said: "The Carapa-1 result is an important exploration outcome with positive implications for both the Kanuku and Orinduik blocks.
While net pay and reservoir development at this location are below our pre-drill estimates, we are encouraged to find good quality oil which proves the extension of the prolific Cretaceous play into our acreage.”
He added that Tullow would now integrate the results of the three exploration wells drilled in the adjacent licences into its Guyana and Suriname geological and geophysical models before deciding the future work programme.
The discovery suggests the extension of the Cretaceous oil play from the Stabroek licence southwards into the Kanuku licence.
While net pay is lower than pre-drill forecasts, the 27 degree API oil “supports the significant potential of the Cretaceous play on both the Kanuku and adjacent Orinduik licences,” Tullow said in a statement.
Repsol Exploración Guyana is the operator of the Kanuku block with a 37.5pc stake.
Tullow Guyana also holds a 37.5pc stake, with Total E&P Guyana holding the remaining 25pc.
Last year, in one day alone shares in Tullow fell by 70pc after CEO Paul McDade quit and the company lowered its production forecasts.
Worth more than £14bn at the height of its valuation, today the company is a shadow of those heydays, with a market capitalisation of £900m.