Cormorant pours could water on Tullow's oil plans

Jo-Maré Duddy – After drilling 3 855 metres hoping to strike oil, Tullow Oil on Monday said it encountered non-commercial hydrocarbons in its Cormorant-1 exploration well in the PEL-37 licence, which was subsequently plugged and abandoned.The Cormorant well had an estimated prospective recoverable resource potential of 124 million barrels of oil, Nampa reported in September.“The Cormorant-1 frontier exploration well was a bold attempt to open a new oil play in this area of Tullow’s offshore Namibia acreage,” Angus McCoss, exploration director of Africa-focused Tullow Oil, said in a statement.According to the company, sandstones were encountered in the primary objective of the Cormorant-1 well, but these proved to be water bearing. Wet gas signatures, indicative of oil, were encountered in the overlying shale section, the company said.“Gas readings while drilling continue to support the concept that there is a working oil system in the area,” McCoss said.AnalysisTullow will analyse the data gathered before deciding on any future activity, he said. Important geological data has been gained from the well, and, in combination with high quality 3D seismic data, will provide valuable insights into the prospectivity of Tullow’s Namibian acreage in PEL-37 and PEL-30, the company said.“While this is not the outcome that we had hoped for, the efficiency of our drilling and our risk management processes resulted in a low financial exposure to this well," McCoss said.Tullow operates the PEL-37 licence with 35% equity and is partnered by ONGC Videsh Ltd (30%), Pancontinental Oil & Gas (30%) and Paragon (5%).Following a farm-out in 2017, Tullow's net expenditure on the well is expected to be approximately US$5 million, nearly N$72 million at yesterday’s exchange rate.Tullow also has a 10% stake in the PEL-30 license in Namibia, alongside Eco Oil and Gas, Azinam, ONGC Videsha and Namcor.Reporting on Tullow’s announcement, The Irish Times said “explorers have returned to Namibia with the rally in crude oil prices this year, hoping to revive prospects in the southern African nation that went quiet after at least 14 wells failed to find commercial oil deposits”.Chariot Oil & Gas recently said it secured the Ocean Rig Poseidon to drill its Prospect S offshore Namibia in the fourth quarter of 2018.Independent estimates by Netherland Sewell Associated Inc. indicate Prospect S has a gross mean prospective resource of 459 million barrels (mmbbls) and a probability of geologic success of 29%. – Own report and Nampa/Reuters

Cormorant pours could water on Tullow's oil plans

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