UK exploration firm strikes it rich again
LONDON - UK's exploration firm Tullow Oil has struck more oil in Kenya, where it made the country's first discovery in March, and is planning to undertake further drilling activity.
"Tullow Oil plc announces that the Ngamia-1 exploration well onshore Kenya in Block 10B has now been drilled to an intermediate depth of 1,515 metres and the total net oil pay encountered so far has increased to an excess of 100 metres across multiple reservoir zones," Tullow said in a statement Monday.
Deeper drilling at the Ngamia-1 well had now revealed significantly larger reserves, it said.
It also had other prospects similar to Ngamia-1 and therefore "the outlook for further success has significantly improved", the company stated.
Analysts at Nomura, SocGen and Credit Suisse all upped their price targets. The shares of Tulluw spurted to the top of the FTSE 100 leaderboard Tuesday, as investors reacted to previous day's news.
Discovery of fresh oil deposit in the remote arid region of Turkana has heightening Kenya's prospects as East African region's oil giant with potential double of those in neighbouring Uganda.
Following further discovery, the company executives paid a courtesy call on Prime Minister Raila Odinga and informed him about the exploration plans.
"This wildcat is an excellent start to our exploration campaign," said Angus McCoss, Exploration Director.
McCoss said the firm was looking forward to the drilling and the evaluation of the deeper potential of the discovered oil wells. The firm pledged to accelerate its exploration campaign in the region.
The oil is total net of 100 metres across multiple reservoir zones in Ngamia-1 well, over a gross oil-bearing interval of 650 metres, the firm said.
It said that with the latest results, many leads and prospects similar to Ngamia have been identified.
"Following this discovery, the outlook for further success has significantly improved," the UK firm said.
Tullow said it had discovered "light waxy crude" from a newly-drilled section. The oil exploration firm has also intensified its focus under-explored areas in East Africa, covering Ethiopia and Uganda.
"Many leads and prospects similar to Ngamia have been identified and following this discovery, the outlook for further success has improved significantly," the firm stated.
The firm is seeking further ground to continue its exploration, saying its oil drilling would also continue.
It is currently seeking to undertake the test drilling of several wells. "Plans are being put in place to drill stem test the well although the exact timing is yet to be decided."
The firm first announced the discovery of Kenya's first ever commercially-viable quantities of oil in March, leading to mass excitement in the East African state.
Currently ranked amongst the top 10 largest economies in Africa and Sub-Saharan Africa's fourth largest in size after South Africa, Nigeria and Angola, is looking to ease a growing fiscal deficit as a result of the oil discovery.
Asset managers at Old Mutual, say Kenya's current oil imports account for 30% of all external expenditures, which makes the latest discovery of significant value.
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