Tullow Oil shares little changed as ‘exciting’ Kenyan discovery unveiled
The oil company said testing at the Erut-1 well at the northern limit of the South Lokichar basin in northern Kenya had shown recoverable oil.
However, shares in London failed to respond to the announcement, hovering around the £3.15 level for most of the day, barely changed from the previous session.
Exploration director at Tullow, Angus McCoss, said: “This is an exciting discovery from a bold exploration well that proves that oil has migrated to the northern limit of the South Lokichar basin.
"This extends the known hydrocarbon limits of the basin beyond the successful Etom discovery into the under-explored northern part of the basin where we have several undrilled prospects.”
He added that further exploration drilling of the area was now being planned.
The shallow depth of the discovery means future wells should be relatively low-cost, analysts at Davy Stockbrokers said.
The announcement comes just days after it was confirmed that founder and chief executive Aidan Heavey is to step down.
The 63-year-old founded the company in Tullow, Co Carlow in 1986. Mr Heavey will remain as chairman, pending shareholder approval, with chief operating officer Paul McDade taking over as CEO in late April.
Last year was a tough one for the company, with 2016 revenues likely to have fallen by almost 19%, according to the end-of-year trading update and board change statement.
Tullow, which is due to publish its 2016 annual results on February 8, has said revenues for last year are likely to amount to around $1.3bn (€1.2bn).
Tullow has interests in more than 110 exploration and licences in 19 countries.
