Tullow boosted by further find in Ghana

A FURTHER oil find in the area has convinced Tullow Oil that its Owo discovery, off the coast of Ghana, has the potential to be another major oil field for the company.

The Irish-founded oil and gas exploration company — which is due to publish its 2010 full-year financial results next Wednesday — said yesterday that further appraisal studies at the discovery, now called Enyenra, encountered oil “in excellent quality sandstone reservoirs”.

Located just 7km from (and connected to) the existing Owo-1 well, the find suggests the Enyenra field has the potential to be another milestone asset for Tullow, a near 50% stakeholder in the project.

“This represents a major step forward in the appraisal of the Enyenra-Tweneboa area and is highly encouraging for our target to declare commerciality later this year,” said Angus McCoss, Tullow’s exploration director, who summed up the latest find as “an exceptional result”.

Tullow is, however, holding off on giving updated forecasts regarding potential capacity of reserves, saying that further analysis is needed. Further appraisal well-drilling in the area will take place in the coming weeks.

“Interpretation of the extent and thickness of this zone away from the well is ongoing,” the company said.

“The well further underpins the prospectivity of the two blocks held by Tullow offshore Ghana. However, the group has a particularly strong equity position in the deep-water Tano licence which should please shareholders,” was the analyst view from Job Langbroek from Davy Stockbrokers.

“The appraisal is expected to lead to a declaration of commerciality later this year and will bring to three, if we include Jubilee and Jubilee SE, the number of commercial projects offshore Ghana,” Mr Langbroek added.

Tullow’s share price was up by 4% in Dublin yesterday, or by nearly 70c at €17.12.