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UPDATE 1-Tullow Oil shares sink after offshore Peru well abandoned

Published 17/02/2020, 07:30 pm
© Reuters.  UPDATE 1-Tullow Oil shares sink after offshore Peru well abandoned

(Adds detail on Marina well, background, share movement)

Feb 17 (Reuters) - Tullow Oil TLW.L will abandon its Marina-1 well in offshore Peru after drilling reached total depth without finding oil, it said on Monday, adding to the company's troubles in Ghana, delays in East Africa and lower-than-hoped-for oil quality in Guyana.

The British energy company's shares, which have lost nearly 80% of their value since November, fell 8.6% to 41.35 pence after the news.

"The well tested the La Cruz and Mal Pelo formations where minor gas shows were encountered," Tullow said in a statement. "However there were no indications of hydrocarbons in the primary targets in the Tumbes formation."

The Marina well is located in 350 metres of water and was the first well to target deep water plays in the Tumbes Basin.

The London-listed company holds a 35% interest in the well, while Australia's Karoon Energy KAR.AX holds a 40% operating equity interest through a subsidiary and Pitkin Petroleum owns the remaining 25%.

Shares of Karoon Energy dropped by as much as 6.7% to A$1.045.

In January, Tullow said it would take a $1.5 billion writedown after cutting its long-term oil price assumptions, downgrading reserves in Ghana and disappointing exploration wells.

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