Tullow encouraged by K4 well indications

Oil exploration company Tullow was today celebrating a potentially “significant” new gas discovery in the North Sea.

Tullow said it had encountered reservoir quality gas bearing sands at its K4 well, which it is exploring in a joint venture with the UK arms of US energy company ConocoPhillips and Gaz de France.

The company said the latest discovery in the southern basin of the North Sea owed much to its technical team, who worked on an under-explored geological area with “potential significant implications” for future exploration.

Tullow said: “The success of K4 also provides further encouragement for the remaining exploration potential of this area.”

A Tullow spokesman said the first gas from the well could be recovered towards the end of next year.

Tullow shares rose 6.84% in Ireland and 5% in the UK today, even though the company also said test drilling at its deep water exploration well in Equatorial Guinea had failed to find hydrocarbons.

Founded in Ireland in 1985, Tullow’s origins are in Africa while it became active in South Asia in 1990 and in the UK gas market in 2001.

The group, which is a member of the FTSE 250 Index, has interests in around 90 exploration and production licences in 15 countries.

Tullow has a 22.5% stake in the K4 well, with US energy giant ConocoPhillips owning 50% and GDF Britain holding 27.5%.

Gaz de France set up its British arm in 1997 as part of an attempt to strengthen its position in the upstream gas market. In particular, it has looked for opportunities in the UK North Sea to increase its reserves and production, especially in the southern basin.