Tullow says Kenya's discovered oil shows promise of commercial viability

Tullow Oil Plc released a set of Kenyan well test results yesterday which it said showed promise of commercial viability.

Tullow, said results from its Twiga South-1 well showed "the first potentially commercial flow rates achieved in Kenya."

The London-listed company has operations in several African countries but investors see its Kenyan drilling as particularly important.

Four flow tests were carried out on Twiga South-1 in January and early February and a fifth test is ongoing, Tullow said, predicting a total combined flow rate of over 2,850 barrels of oil per day for the well in western Kenya.

"That's better than the 500 barrels a day... they discussed as an expectation," said Macquarie analyst Mark Wilson. "They've pulled a rabbit out of the hat there on operational progress."

The tests also provide "real encouragement" for Ngamia, another Tullow prospect in Kenya's Rift Basin, the company said.

The  rig that was drilling at Twiga South-1 will now move to Ngamia-1A to re-enter the well there and perform four flow tests.

Tullow said these tests are expected to deliver rates similar to Twiga South-1.

To temper expectations Tullow said it will require considerably more exploration and appraisal before the commercial threshold for the basin is achieved.

Another keenly-watched prospect in its Kenya-Ethiopia portfolio, the Paipai-1 well, encountered "difficult hole conditions" Tullow said. It hopes to draw some conclusions on it by the end of February.

Africa Oil is a partner at Twiga South-1 and Afren Plc is a partner at PaiPai.