Tullow upgrades estimates on Kenya oil wells

Irish-founded exploration firm Tullow Oil has moved a step closer to commercialisation in Kenya—long since tipped as being the next major African territory for the company.

In its half-year trading update, Tullow yesterday said it has significantly upgraded its resource estimates for its assets in Kenya’s South Lokichar Basin.

It comes following better- than-expected flow rates from tests at the Ngamia and Twiga-South wells.

As a result, the exploration company has doubled its previous estimates of net oil pay at those wells — to 200m and 75m, respectively — and now sees a potential combined flow rate of 5,000 barrels per day.

Furthermore, Tullow has said that those two Kenyan wells could have up to 250m barrels of oil in place, with that forecast potentially rising after appraisal.

Yesterday’s update also mentioned that Tullow has made substantial progress and expects to sign a memorandum of understanding, in the coming weeks, regarding the development of Uganda’s Lake Albert Basin and the commercialisation of oil there, which could be worth $50bn to the country.

The second half of this year will see Tullow glean results from wells in Kenya, Ethiopia, French Guiana, Norway, and Mauritania; leading management to say that the business is well- placed for the remainder of this year and also into 2014.

Tullow’s share price was up by 2.6% in London, yesterday; and rose by 3% — to €12.39 — in Dublin.

The company publishes its first-half financial results later this month.

Elsewhere, yesterday, Petroceltic announced that its operating partner on the Carpignano Sesia well in Italy has lodged an application with the Italian Government requesting a further suspension of the permit, in a bid to identify a new well location and drilling plan.

Meanwhile, fellow Irish explorer, San Leon Energy has announced the farming- out of 45% of its Baltic Basin Concession to the Polish company, Wisent Oil & Gas.