Tullow Oil Plc, the explorer for hydrocarbons on three continents, rose the most in two months in London after the company made a second ``significant'' discovery offshore Ghana.
Tests indicate oil found at the Hyedua-1 well is probably connected to reserves discovered at the nearby Mahogany-1 project, London-based Tullow said today in a statement. The combined reserves are estimated to contain as many as 800 million barrels of oil.
Tullow is counting on new discoveries in Africa to boost output after it was forced to cut a full-year production forecast because of drilling delays in the North Sea and declining natural-gas prices in the U.K. The company expects to start pumping oil from Ghana in 2012.
``It's extremely good news,'' Charlie Sharp, a London-based analyst at Jefferies International Ltd., said today in a telephone interview. ``They believe these two wells are linked and you can make the assumption that the prospect is one huge field.''
Tullow surged as much as 7.7 percent, the biggest one-day gain since June 20. The shares traded at 485.25 pence as of 11:40 a.m. local time, valuing the company at 3.5 billion pounds ($7 billion.)
The drilling results ``more than support the reserves numbers in the market,'' Tullow said. Consensus estimates for reserves from the two wells are between 400 million and 800 million barrels of oil, the company said.
Record
Suitable ships have been identified to conduct a seismic survey and ``rapidly appraise'' the Ghanaian prospect, according to today's statement.
Production is likely to start from the Ghanaian fields in 2012, Angus McCoss, Tullow's exploration director, said today by phone from London.
The company plans to drill three more wells this year to ``define the size of the prize'' and is ``looking at options and ideas'' to accelerate production from the prospects, he said.
Tullow shares jumped to a record in June after the company found oil at the Mahogany-1 exploration well. It estimated at the time that the reserves hold 250 million to 600 million barrels.
Eight Blocks
The company has drilling rights for eight blocks along an underground ``fairway'' of oil prospects offshore Ghana and Ivory Coast. The back-to-back discoveries in Ghana ``allow us to be more certain about the geology'' of the area, McCoss said.
Tullow's partners for the Deepwater Tano license, where the Hyedua-1 well is located, include Kosmos Energy LLC, Anadarko Petroleum Corp., Sabre Oil and Gas Ltd., and the Ghana National Petroleum Corp.
The company said last month that daily output in 2007 would average 72,000 to 75,000 barrels of oil equivalent a day, compared with a previous forecast of more than 80,000 barrels.
U.K. production may fall because of drilling delays on the Ketch field and after the company terminated a drilling-rig contract early because of high rig rates and declining gas prices, Tullow said.
``High-cost wells with moderate volume targets in the North Sea don't usually stand up against these high-impact opportunities in Africa,'' McCoss said today.
Exploration in Ghana, Namibia and Uganda ``are three key areas of potential growth'' for Tullow, according to Sharp. ``Out of these three, at the moment Ghana looks the most attractive.''
Tests indicate oil found at the Hyedua-1 well is probably connected to reserves discovered at the nearby Mahogany-1 project, London-based Tullow said today in a statement. The combined reserves are estimated to contain as many as 800 million barrels of oil.
Tullow is counting on new discoveries in Africa to boost output after it was forced to cut a full-year production forecast because of drilling delays in the North Sea and declining natural-gas prices in the U.K. The company expects to start pumping oil from Ghana in 2012.
``It's extremely good news,'' Charlie Sharp, a London-based analyst at Jefferies International Ltd., said today in a telephone interview. ``They believe these two wells are linked and you can make the assumption that the prospect is one huge field.''
Tullow surged as much as 7.7 percent, the biggest one-day gain since June 20. The shares traded at 485.25 pence as of 11:40 a.m. local time, valuing the company at 3.5 billion pounds ($7 billion.)
The drilling results ``more than support the reserves numbers in the market,'' Tullow said. Consensus estimates for reserves from the two wells are between 400 million and 800 million barrels of oil, the company said.
Record
Suitable ships have been identified to conduct a seismic survey and ``rapidly appraise'' the Ghanaian prospect, according to today's statement.
Production is likely to start from the Ghanaian fields in 2012, Angus McCoss, Tullow's exploration director, said today by phone from London.
The company plans to drill three more wells this year to ``define the size of the prize'' and is ``looking at options and ideas'' to accelerate production from the prospects, he said.
Tullow shares jumped to a record in June after the company found oil at the Mahogany-1 exploration well. It estimated at the time that the reserves hold 250 million to 600 million barrels.
Eight Blocks
The company has drilling rights for eight blocks along an underground ``fairway'' of oil prospects offshore Ghana and Ivory Coast. The back-to-back discoveries in Ghana ``allow us to be more certain about the geology'' of the area, McCoss said.
Tullow's partners for the Deepwater Tano license, where the Hyedua-1 well is located, include Kosmos Energy LLC, Anadarko Petroleum Corp., Sabre Oil and Gas Ltd., and the Ghana National Petroleum Corp.
The company said last month that daily output in 2007 would average 72,000 to 75,000 barrels of oil equivalent a day, compared with a previous forecast of more than 80,000 barrels.
U.K. production may fall because of drilling delays on the Ketch field and after the company terminated a drilling-rig contract early because of high rig rates and declining gas prices, Tullow said.
``High-cost wells with moderate volume targets in the North Sea don't usually stand up against these high-impact opportunities in Africa,'' McCoss said today.
Exploration in Ghana, Namibia and Uganda ``are three key areas of potential growth'' for Tullow, according to Sharp. ``Out of these three, at the moment Ghana looks the most attractive.''
Via: Bloomberg
