(Alliance News) - Tullow Oil PLC on Thursday announced the discovery of oil on the Kanuku licence off the coast of Guyana, South America.
Early results from drilling at the Carapa-1 well suggest the finding of oil in Upper Cretaceous sandstones. Results show the four metres of net oil pay has a sulphur content of less than 1%.
This find, Tullow said, indicates the Cretaceous oil in the Stabroek licence extends southwards into Kanuku.
The company did note, however, that the four metres of oil is less than expected, though the well still has potential.
Chief Operating Officer Mark MacFarlane said: "The Carapa-1 result is an important exploration outcome with positive implications for both the Kanuku and Orinduik blocks. While net pay and reservoir development at this location are below our pre-drill estimates, we are encouraged to find good quality oil which proves the extension of the prolific Cretaceous play into our acreage.
"We will now integrate the results of the three exploration wells drilled in these adjacent licences into our Guyana and Suriname geological and geophysical models before deciding the future work programme."
Tullow is currently going through a rocky patch. In December, Chief Executive Paul McDade left with immediate effect amid continued underperformance from the TEN and Jubilee fields in Ghana. This led to several production guidance cuts in 2019.
Given cash flow forecasts, Tullow also suspended its dividend.
Shares in Tullow were down 8.2% on Thursday morning at 58.74 pence each. A year prior, they were more than double that price.
By George Collard; georgecollard@alliancenews.com
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Tullow Oil (TLW)