Tullow Oil (LON:TLW) have seen their shares dip on Monday morning as they gave an update on their Peruvian operations.
The firm said that results had been disappointing from the Marina-1 exploration well off the coast of Peru.
Tullow noted that they did not find any significant hydrocarbons, and that it was still testing the La Cruz and Mal Pelo formations, with some minor gas shows found but no discoveries in the main targets.
The oil firm said that the well was drilled to a total depth of 3,022 meters in 362 meter deep waters.
Following the disappointing results, Tullow decided that they will plug the Marina-1 well and abandon further operations at this site.
It was not all bad for Tullow, as the firm only held a 35% interest in the well, Karoon Energy are the major partner holding 40% whilst Pitkin Petroleum holds the remaining 25%.
“This is the first ever well in the deep-water section of the under-explored Tumbes basin. We will now integrate the important well information with the seismic data that we are currently reprocessing and update our prospect inventory for blocks Z-38 and Z-64. Tullow is building an extensive exploration position in Peru and, while this result is not what we had hoped for, we remain positive about Peru’s wider offshore exploration potential.” Chief Operating Officer Mark MacFarlane commented.
Tullow continue their strategic review
Hectic would be an understatement if we looked at the last few weeks for Tullow Oil.
The firm said in January that they are planning to conduct a strategic review as the firm looks to find a new CEO.
A few weeks back, Tullow reset their production guidance with regards to their operations in Ghana. Initially, it guided around 87,000 barrels of oil per day for 2019, and for between 70,000 barrels and 80,000 barrels in 2020.
However, the oil firm confirmed that production in 2019 was 86,700 barrels of oil per day, and it reaffirmed the 2020 guidance, which was something for shareholders to take as a positive in what has been a hectic few weeks for the firm.
Tullow guided for revenue in 2019 of approximately $1.7 billion, gross profit of around $700 million, and capital expenditure around $490 million.
The disappointment today does alluded to some other issues at Tullow. Since the December crisis, the firm has struggled to bounce back however this will take time as Tullow have said and shareholders will have to be patient.
Shares in Tullow trade at 43p (-4.35%). 17/2/20 10:30BST.
