U.K. independent oil and gas company Tullow Oil PLC (TLW.LN) said Monday that new drilling results and other tests confirm the Owo prospect in Ghana is a "major new oil field."
U.K.
independent oil and gas company Tullow Oil PLC (TLW.LN) said Monday that new
drilling results and other tests confirm the Owo prospect in
Ghana
is a
"major new oil field."
Owo is the second major oil discovery Tullow has made off
Ghana
's
shores. The first, Jubilee, which will produce its first oil later this year,
propelled Tullow into
London
's
blue-chip stock index. Owo is near the existing Tweneboa oil and gas discovery.
In July, Tullow said it had found the Owo oil field in the deepwater Tano
block, potentially adding 1 billion barrels of oil equivalent to the resource
estimate for the area.
On Monday, Tullow said in a statement that the Owo-1 exploration sidetrack well
has significantly extended the column of high quality light oil discovered via
the Owo-1 well.
"The discovery of very material volumes of light oil in Owo and the fact
that the oil is concentrated in high quality channel sands greatly enhances our
outlook for the efficient future development of both the Owo and Tweneboa
fields," said Angus McCoss, Tullow's exploration director.
Bank of America Merrill Lynch -- Tullow's house broker -- said in a note Monday
that the sidetrack well confirms Owo's potential and materially improves the
quality of the field, even though the "Owo/Tweneboa upside [P10] remains
unchanged at 1.4 billion barrels of oil equivalent" in possible reserves.
The Owo field itself is now estimated to contain some 200 million barrels of
proven and probable oil resources, with an upside case of 550 million barrels
of possible reserves, said the Royal Bank of
Scotland
, the
other Tullow house broker, in a note.
Citibank said in a note that Tullow's increased guidance across the
Owo/Tweneboa/Ntomme complex prompted Citi to raise its net asset value
estimate. The bank has a buy rating for Tullow, and it raised its target price
20 pence to 1470 pence a share.
Evolution Securities, which also rates Tullow a buy, increased its Tullow
target price by 50 pence to 1500 pence, partly reflecting the prospect's
increased likelihood of development, it said in a note.
Around 1237 GMT, Tullow shares traded up about 0.5%, or 6 pence, at 1240 pence.
Tullow operates the Deepwater Tano license and holds a 49.95% stake. Its
partners include Kosmos Energy
Ghana
with
18%, Anadarko Petroleum Corp. (APC) with 18%, Sabre Oil & Gas with 4.05%
and the Ghana National Petroleum Corporation (GNPC) with a 10% carried
interest.
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