Africa-focused Tullow Oil Plc hailed a "very successful" exploration programme in frontier oil country Kenya on Wednesday, reporting a strong well test flow rate and doubling its estimates of the depth of the oil resource in the basin.
In the first half 2013 trading statement it also announced confirmation of a new oil discovery at its Etuko prospect in the southern part of the Lokichar basin, and said its Sabisa-1 well in Ethiopia had established that the hydrocarbon system there was oil prone.
The report for Tullow's Ngamia-1 well said tests had found a constrained flow rate of 3,200 barrels a day, more than the minimum analysts had been hoping for, and doubled its estimate of net oil pay depth to 200 metres for Ngamia-1 and 75 metres for another Lokichar well, Twiga-South-1.
"The Kenya upgrades... will drive the stock higher today," said analyst Mark Wilson at Macquarie.
"Overall Kenya is getting the company back on track to following up basin opening success with basin commercialising success."
Tullow sees a flow rate potential of 5,000 barrels a day based on Ngamia-1 and Twiga-South-1, and estimates there are 250 million barrels of oil in place - a forecast it said could increase further after appraisal.
Tullow is focused on exploration but is producing oil in Ghana. It said government talks about developing resources it discovered in Uganda, another frontier oil country, were "ongoing".
By Andrew Callus (Reuters)
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