Tullow Finds Love At Twiga-South 1
BMI View: Tullow's share price saw big gains following reports that recent discoveries in Kenya may indeed be commercial. The news was welcome for both Tullow and for Kenya's efforts to become a producer of oil. We maintain our view that Kenya could well outperform other frontier plays should exploration confirm the country is capable of significant commercial production. While we continue to watch regulatory developments with caution , we believe the latest news will only reinforce the excitement surrounding Kenya's prospects with a possible licensing round to come before end Q113.
Better-than-expected results from a flow test reported by Africa heavy Tullow Oil were cheered by the markets, h o ld ing the possibility that its wells could lead to the first commercial oil production in Kenya. I mmediately following the news, the company's share price rose more than 5% on February 13 2013.
This was welcome news for Tullow after a n uncharacteristically mixed drilling record in 2012 , with markets accustomed to a strong performance fro m the London- listed independent ( see our online service, November 1 2012, 'Tullow And Africa Oil Strike Again With Latest Onshore Find ' ). However , results from Kenya 's Twiga South-1 well surpassed expectation s , with a fifth test ongoing . The company predicted a combined flow rate of 2 , 850 barrels per day (b/d) at the well , much better than the 500b/d originally expected.
|Kenya Helps Tullow Reach Higher|
|Tullow Share Performance (GBp)|