Tullow Oil declines after Northern Petroleum issues JV well update

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.

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".

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

Recommended

The top funds to invest in
Funds

The top funds to invest in

Investors continue to favour passive funds in April though figures reveal an actively managed money market fund also caught their eye. We look at wher…
3 May 2023
The ten highest dividend yields in the FTSE 100
Income investing

The ten highest dividend yields in the FTSE 100

Rupert Hargreaves takes a look at the companies with the highest dividend yields in the UK’s blue-chip index
20 Apr 2023
Best junior stocks and shares ISA platforms
Isas

Best junior stocks and shares ISA platforms

A junior stocks and shares ISA is a great way to save for your child tax-efficiently. But it can be confusing deciding which investment platform to ch…
28 Mar 2023
The outlook for Shell shares is mixed, despite bumper profits
Energy stocks

The outlook for Shell shares is mixed, despite bumper profits

With profits surging, it looks as if Shell is on a roll, but the company’s growth from here is hard to see as Rupert Hargreaves explains.
6 Feb 2023

Most Popular

Nationwide to give £100 cash boost to customers
Personal finance

Nationwide to give £100 cash boost to customers

Nationwide Building Society is giving customers £100 as it reinvests profits. Dubbed the Nationwide Fairer Share scheme, we look at who is eligible.
22 May 2023
Share tips of the week – 26 May
Investments

Share tips of the week – 26 May

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
25 May 2023
Holiday rip-off: Millions of travellers hit with hidden costs by using debit card abroad
Personal finance

Holiday rip-off: Millions of travellers hit with hidden costs by using debit card abroad

A family of four on a week-long trip to France could pay an extra £212 in fees by using their everyday bank card compared to the lowest-cost option, a…
23 May 2023