23.08.2007 Tullow Oil Makes It Two In A Row In Ghana With...

23.08.2007
Tullow Oil Makes It Two In A Row In Ghana With Deepwater Tano Discovery
Two months after striking first oil with its Mahogany-1 well offshore Ghana, Tullow Oil and its partners have done it again. The company reported yesterday that its Hyedua-1 exploration well, drilled on the adjacent Deepwater Tano licence, had discovered a “significant light oil accumulation” based on well results, wireline logs and fluid samples from the reservoir. Crucially, the discovery appears to be linked to the Mahogany site, making this a find of potentially enormous significance.

The latest discovery marks another major triumph for the Ghana exploration effort. It also caps a hugely successful year for Tullow’s exploration team following earlier success in the field in Uganda. Further testing on the Mahogany site, and now Hyedua, are still required though it is expected that the reservoir will dwarf other known hydrocarbons deposits in the West African country. Until now, Ghana has largely been overshadowed by its neighbours as a deepwater oil province.

Tullow said initial data indicates the two wells are likely to form a single continuous trap extending across the West Cape Three Points and Deepwater Tano blocks. The news further fuels the notion that Tullow and its partners are onto something really big. Initial chatter that the Mahogany find could hold as much as 400 to 800 million barrels is now being revised upwards. Shares are fizzing and there is talk that Tullow is sitting on a discovery of world class size. Typically, this means a billion barrels.

If Uganda was exciting, Ghana pitches Tullow into a whole new realm again. This is the largest thing the company has been involved in by some way. “The discovery of oil in Hyedua-1, and the confirmation of its communication with the recent Mahogany discovery, represents a major step forward for the Republic of Ghana and for Tullow and its partners,” said Tullow’s chief executive Aiden Heavey. “It significantly enhances our understanding of the resource, enables us to focus and accelerate our appraisal programme, and is highly encouraging for our plans to establish commercial production in Ghana.”

The Hyedua-1 well, the first in the Deepwater Tano licence, targeted the equivalent Santonian turbidite sandstones encountered in the Mahogany discovery, some 5.3 km to the northeast. The well encountered a gross reservoir interval of 202 metres, containing 108 metres of high quality stacked reservoir sandstones, and net hydrocarbon-bearing pay of 41 metres. With Mahogany, the results indicate a combined hydrocarbons column in excess of 361 metres.

The drill ship is operating in water depths of 1,520 metres to a total depth of 4,002 metres, not especially deep for this part of the world. There is speculation that the joint field could come onstream as early as 2011. The Hyedua-1 well will now be sidetracked, prior to casing, to acquire core data and suspended for potential use as a development well. Planning is underway to appraise the combined accumulation which will include a 910 sq km high resolution 3D seismic survey. A programme of up to three additional appraisal wells is also being lined up for later this year.

Tullow operates the Deepwater Tano licence and holds a whopping 49.95 per cent interest in the area. Its partners include Kosmos Energy, a subsidiary of Anadarko Petroleum, Sabre Oil & Gas and the Ghana National Petroleum Corporation. In the adjacent West Cape Three Points block, which hosts the Mahogany discovery, Tullow holds a 22.9 per cent stake. This block is operated by Kosmos Energy. As more wells are drilled in the area Tullow shareholders should get ready to enjoy the ride.