Tullow rises 12% on latest drill figures

SHARES in Tullow Oil enjoyed another strong day’s trading yesterday — rising by more than 12%, or 89c, to €8.20 — on the back of latest estimates that the company’s Mahogany well off the coast of Ghana could have an oil capacity of up to 20% more than originally anticipated.

The Irish exploration company said that latest appraisal drills at its Mahogany-3 well had located “light oil columns”, which illustrated both an extension to the overall Jubilee oil field in the area and a deeper well than originally forecast. Drilling in the so-called Mahogany Deep prospect — located underneath the Mahogany-3 well — showed 17 metres of “good quality oil bearing reservoir sandstones at levels significantly deeper than the oil water contacts previously intersected.”

The company added that the latest success “opens up further potential in the region and is the subject of ongoing evaluation”.

“Successfully proving up a significant south-eastern extension of the Jubilee field and discovering an additional light oil accumulation beneath, is another excellent result from our Ghananian exploration and appraisal,” Tullow’s chief executive, Aidan Heavey said.

He added that the latest appraisal tests were “bold steps” by the company and that “while the combined impact is currently being evaluated, it is clear that they have confirmed our view of the substantial upside potential of the Jubilee field and increased our expectations of the extent of the core of the field.”

The Mahogany well is in Ghana’s west cape three points mining licence, in which Tullow owns a 22.9% stake. The Jubilee field, to which it is linked, is Tullow’s single most significant mining asset.