Tullow Oil awaits latest test results

TULLOW Oil should be in a position to better gauge the long-term potential for a third large oil discovery in western Africa when it receives test results in the next fortnight.

The Irish exploration company, which reported first-half figures broadly in line with expectations, is awaiting results from exploratory drills in the Venus-B well in Sierra Leone.

These results could lead to a licence to a new stream of activity in northwest of Africa to rival its main asset, the Jubilee mine in nearby Ghana.

In addition to Venus, test results are also pending on the Ngassa-2 well in Uganda – Tullow’s second most important region, behind Ghana.

The latter well has a forecasted capacity of 600 million barrels of oil.

Tullow reported pre-tax profits of £34.8 million (€39.6m) for the first six months of this year.

That figure was down by 81% on the £187.3m (€213.52m) profit reported for the corresponding period last year.

Basic earnings per share fell, year-on-year, by 84% to 2.73p; operating profit came in at £60.7m (€69.2m), 70% down on last year; and group revenue fell by 23% to £291.3m (€332.2m).

Tullow chief executive Aidan Heavey said it had been “a good first half”, with development projects on target and exploration campaigns continuing to deliver discoveries.

“With continued strong progress with our major projects and further expansion of our exploration portfolio, we’re well positioned for significant production growth from 2010 and beyond,” he said.

He added that the company is on the look out for a strategic partner for part of its Ugandan-based assets. The company is set to sell a stake in its Block 2 licence in that country’s Lake Albert area. Interest from China and Italy, in the form of exploration company ENI, has been speculated upon.

Tullow shares closed down 3.55% yesterday at €11.96, giving the company a stock market valuation of €9.59 billion.