The well hit only 4 metres net oil pay, which was below pre-drill expectations, however, the discovery is in the Cretaceous play and it is higher quality crude – rather than the heavy, sulphurous oil found last year in the Orinduik licence block.
Tullow shares were dented heavily in late 2018 as analysis of earlier results and samples revealed that the oil found in the Joe and Jethro wells was of lower value and would potentially require additional processing.
Oil found in the Carapa well, however, was tested and confirmed as 27 degree API crude with a sulphur content below 1%.
Significantly, the Carapa result suggests an extension of the Cretaceous play from Exxon’s prolific Stabroek licence (which has seen 15 successful wells, for around 6bn barrels of crude resources) in Kanuku.
It also supports the expectation that the adjacent Orinduik block retains “significant potential” for the Cretaceous play.
On Friday, Eco Atlantic Oil & Gas Plc (LON:ECO) (CVE:OEG) – one of Tullow’s exploration partners in Guyana – described the new discovery as “very important” and said that it is expecting 2020 to be a significant year.
Carapa-1 was drilled by Repsol in the Kanuka block which is adjacent to both Eco’s Orinduik exploration area and Exxon’s prolific Stabroek licence block.
“The Carapa discovery is very important to us technically and confirms our thinking on prospectivity on our Orinduik block,” said Colin Kinley, Eco’s chief operating officer.
“The existence of a good oil grade unaffected by sulphur in board of us is excellent news.
“We have a proven source kitchen to the North, with ExxonMobil and partners having defined and now producing 32 API at the Liza field to the North of us, and now a 27 API oil discovery on Carapa to the South of us.
“We continue to gain a good understanding of the transportation and pooling systems, and we can see the reservoirs clearly in the cretaceous.”
“As more wells are drilled, it is becoming clearer to understand and define new drilling locations.
“We see very significant thick pay opportunities in the cretaceous section on Orinduik and we are currently defining our upcoming drilling plans, which we hope to have confirmed in the next few weeks.”
Meanwhile, Anglo African Oil & Gas PLC (LON:AAOG) gave a sceptical response on Friday to a revised proposal from Jub Capital, the investment manager focused on smaller companies.
Jub made its initial proposal to acquire newly issued Anglo African (AAOG) shares, plus the shares currently held by corporate-financier RiverFort and its associates on the last day of 2019, sending Anglo African’s shares soaring on Tuesday – New Year’s Eve. It has now tweaked its proposal, offering to pump £100,000 into Anglo African by subscribing for 10mln new shares at a penny each; previously, the company had offered to subscribe for 30mln shares.
As before, it is offering to buy up RiverFort’s stake in Anglo African at a penny a share, which would result in around £722,000 being returned to AAOG through an investor sharing agreement with RiverFort.
Jub repeated its call for management changes and it still envisages the withdrawal of the resolutions that would effectively see AAOG become a cash shell, following asset divestments.
Anglo African told investors that the Jub proposal envisages further equity capital raises in the future to fund the capital expenditure for the work programme on the Tilapia Field, which would result in further dilution for shareholders. The current budget for the planned work programme is US$5.5 million; Anglo African currently has a market capitalisation of £3mln (about US$3.9mln).
The board of Anglo African is seeking more information from Jub before making a fair assessment regarding the proposal.
As it stands at the moment, however, certain of the conditions in the Jub proposal make it undeliverable in the opinion of Anglo African’s board. In particular, the company cannot accede to the sale of the shares held by RiverFort nor can it defer or amend the terms of the general meeting on 13 January without exposing itself to potential liabilities under the deal signed with Zenith.
i3 Energy Plc (LON:i3E) told investors on Thursday that it is preparing for a new appraisal campaign for the Serenity and Liberator fields, with work set to start in mid-2020.
The aim will be to further delineate the two fields which are estimated to host more than 600mln barrels of in-place crude oil.
The North Sea firm said planning has now begun for a new multi-well programme. The envisaged programme is subject to new funding. I3 is kicking off a farm-down process in order to bring in a partner to fund the planned drilling.
“We believe our acreage, together with the data retrieved from our 2019 drilling campaign, will be very attractive to potential farminees looking to add material barrels and near-term production to their portfolios,” said Majid Shaffiq, i3 Energy chief executive.
As expected, it was announced on Thursday that liquidators had been appointed to G3 Exploration Limited (LON:G3E) to assist with the China-focused gas group’s restructuring.
The joint provisional liquidators (JPLs) have been appointed by the Grand Court of the Cayman Islands to preserve and protect the company’s assets and identify any opportunities that may exist to restructure or refinance the company.
The liquidators have until 5 February 2020 to explore such possibilities and prepare a report to the court as to the likelihood of a viable restructuring. During this eight-week period, the existing board of directors and management of G3 will remain in office.