Tullow Oil Finds 2nd Well Site in Orinduik Offshore Guyana

Tullow Oil plc TUWOY, along with its partners in the Orinduik oil and gas field that is located offshore Guyana, recently chose the location for a second well in the field, as part of its 2019 drilling program. The company has approved the drilling budget for the prospect named Joe.

The Stena Forth Drill Ship has been contracted for drilling the prospect. At first, the drillship will dig the Jethro-Lobe well, which is scheduled for early June. Then it will move to the Joe well, which will be drilled at a water depth of 650 meters in mid-July. The Joe prospect from the Upper Tertiary period is expected to hold 150 million barrels of oil equivalent (BOE) and has a 43.2% chance of success. The field is expected to contain around 3.9 billion BOE.

Tullow is the operator of the Orinduik Block and holds 60% stake in it. The company has TOTAL S.A. TOT and Eco Atlantic as partners in the block, with 25% and 15% interest, respectively. Eco Atlantic will bear net cost of around $3 million in the Joe prospect for its working interests. From Eco Atlantic’s perspective, the net cost for Joe is much lower than the Jethro-Lobe well of around $6.9 million. The huge difference in cost between the two wells is due to the inclusion of rig mobilizing and demobilizing expenses in the first well’s cost.

Tullow Oil and its partners in the block expect the two wells to hold a total of 370 million barrels of Gross Prospective Resources. The company has huge plans of operation in the Orinduik Block’s Jethro prospect in second-quarter 2019. It has a Tertiary target of more than 100 million barrels of oil in the block at 1,350 meters of water depth. Total net well cost to the company is expected at around $30 million. The company intends to focus on the Kanuku block’s Carapa prospect in the third quarter. At a net well cost of $20 million, it has a Cretaceous target of more than 200 million barrels of oil at a water depth of 70 meters.

Price Performance

Tullow has gained 10% in the past year against the 11.2% collective decline of its industry.

Zacks Rank & Other Stocks to Consider

Currently, the company has a Zacks Rank #2 (Buy). Investors interested in the energy sector can opt for other top-ranked stocks as given below:

Denver, CO-based Antero Resources Corporation AR is an upstream energy company. Its top line in 2019 is expected to increase 9% year over year. The stock currently has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Houston, TX-based ConocoPhillips COP is an exploration and production giant. In first-quarter 2019, its sales are expected to grow 5.2% year over year. The company currently holds a Zacks Rank #2.

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