Tullow forced to quit two oil wells

Tullow Oil has abandoned two wells in two continents after finding no hydrocarbons at either.

The news of the negative drilling results — in Mozambique and French Guiana — hit the Irish- founded exploration company’s stock price; with it falling by over 7% in London, where most of its shares are traded.

While the Cachalote-1 exploration well in Mozambique did show good-quality gas bearing reservoir sandstones, the well is unlikely to be commercial on a standalone basis, as its deeper target didn’t show any indications of hydrocarbons

However, Angus McCoss, Tullow’s exploration director, noted that hope remains for the company’s operations in the south-eastern African country.

“The potential for discovering oil in this region remains after we encountered wet gas shows in the deeper sidetrack.

“We will integrate this valuable data into our regional model to improve our chances of unlocking the oil play potential offshore Mozambique,” he said.

Drilling activity will now move to a wild-cat well at the eastern point of the Ibo High licence.

With regard to South America, Mr McCoss said that the Cebus-1 well was “an ambitious wild-cat exploration well, which did not encounter hydrocarbons”.

Tullow — which has a 27.5% stake in the Guyane Maritime licence, in French Guiana — said that drilling will now move onto the final well in a four-well programme.

Tullow’s London share price dipped by 7.1% yesterday to £10.41.

Elsewhere, Falcon Oil & Gas — the Dublin-headquartered ‘unconventional’ explorer with interests in Hungary, Australia and South Africa — has announced that hydrocarbons have been encountered at the first of a planned three-well drill programme, aimed at evaluating the gas potential of the Algyo formation in Hungary.

The well has been suspended, pending further technical evaluation prior to the undertaking of a rig-less testing programme later in the year.

The location of the second of the three-well programme will be decided after a full evaluation of the Kutvolgy-1 well results.

Operations on the second well are expected to commence sometime in the fourth quarter of the year.