UPDATE: Anadarko,Tullow Oil Find Hints Big W Africa Potential
September 16 2009 - 7:55AM
Dow Jones News
Anadarko Petroleum Corp. (APC.LN) and Tullow Oil PLC (TLW.LN)
said Wednesday they have discovered oil off the coast of Sierra
Leone, a find that analysts say signals huge potential for further
discoveries in an area stretching east through the waters of
Liberia, Cote d'Ivoire into Ghana.
"The Venus discovery confirms the existence of an active
petroleum system in the basin and enhances the prospectivity of our
vast West Africa acreage position," said Bob Daniels, Anadarko's
senior Vice President of Worldwide Exploration.
With the 1.2 billion barrel Jubilee field already discovered in
Ghana at the eastern limit of the system, and this success at the
Venus well at the western limit in Sierra Leone, "we have
established bookends spanning approximately 1,100 kilometers across
two of the most exciting and highly prospective basins in the
world," he said.
"If you've got hydrocarbons at two extremes, there's a good
chance of hydrocarbons being in the middle," said Panmure Gordon
analyst Peter Hitchens. "There is a huge amount of acreage and a
large number of prospects," with great potential for both Tullow
and Anadarko, he added.
"The significance of Venus-B's success is huge," said Evolution
Securities analyst Richard Griffith. Tullow has identified six
prospects between Ghana and Sierra Leone that could be of similar
size to its flagship Jubilee field, he said.
However, NCB Stockbrokers analyst Peter Hutton cautioned that a
large amount of upside from future West African oil discoveries is
already priced in for Tullow. To get to a share price of 1170
pence, which Tullow hit earlier Wednesday, requires around a
billion barrels of reserve upside for Tullow to be de-risked
through further exploration, he said.
"Sell into strength, but leave some position for a (takeover)
bid, which looks even more inevitable after this confirmation,"
Hutton said.
The Venus B-1 well was drilled to a total depth of approximately
18,500 feet in about 5,900 feet of water and encountered more than
45 net feet of hydrocarbon pay, Anadarko said. It is the first
deepwater test in the Sierra Leone-Liberian Basin.
Anadarko operates the Venus well with a 40% interest. Its
co-owners are Woodside Petroleum Ltd (WPL.AU) of Australia with
25%, Spain's Repsol YPF SA (REP.MC) with 25% and Tullow with
10%.
At 1155 GMT, Tullow shares were up 5.6%, or 60 pence, at 1147p.
Andarko shares had not yet started trading.
-By James Herron, Dow Jones Newswires; +44 (0)20 7842 9317; james.herron@dowjones.com