Tullow Oil saw its shares drop significantly after its joints venture partner Northern Petroleum gave an update on one of its wells at its joint venture project in French Guiana.
Following an announcement by Northern Petroleum, the company confirmed that the GM-ES-3 well, which to-date has had no significant hydrocarbon shows, will be drilled deeper in the hope that it will provide information that is crucial to developing the companies' understanding of the exploration potential of the area.
Tullow indicated it was less than happy with Northern Petroleum's announcement, saying it was issued "without prior notice [...] and without the approval of the operator or the joint venture partners".
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Get 6 issues free
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
In a statement, Tullow said: "Although the Priodontes well has not thus far encountered significant hydrocarbons, Tullow believes that this is due to a trap-specific issue and has no follow-on consequences for prospectivity elsewhere in the block.
"Tullow also notes that the shows encountered in the Bradypus fan, as described in Northern Petroleum's release, underline the presence of a working oil charge system.
"This well is now being deepened to a proposed target depth of 6,483 metres to target additional formations after which Tullow will issue a further update."
Northern Petroleum said it had made the decision alongside its partners that the well provides a suitable location to drill deeper in a plan to penetrate the full post Atlantic rift sequence.
It added the duration of the drilling will depend on results from the formations it encounters.
Derek Musgrove, Managing Director of Northern stated: "Following the oil discoveries of GM-ES-1 in 2011, the task before us was to explore the licence to ascertain its wider potential. Whilst the sand package in the primary target proved not to have significant hydrocarbons at this location, the oil staining encountered in the Bradypus fan is encouraging of the broader active hydrocarbon systems and potential.
"Northern supports this fuller exploration approach to this well. It is likely to provide Partners with further geological data imperative to gaining further understanding of the complex geology in this area."
Shares in Tullow Oil declined 9.03% to 982.50p by 14:40 on Wednesday. Northern Petroleum shares plunged 17.2% to 32.50p.
NR
How high earners could boost their pension by thousands and cut childcare costs
Monzo launches 11 ETFs via Blackrock to help savers invest
