Tullow has a 30% stake in the Araku well, in the Suriname portion of the Guyana basin and, in a note, analyst Mark Wilson, highlighted that the 500mln barrel exploration target could open up further ‘follow on’ potential in the basin.
“Attending a Tullow Oil analyst meeting yesterday specifically laid on to discuss its Guyana basin exploration emphasized clearly how the company is ‘reasonably confident its hydrocarbon’ that is generating ‘very large, world class, seismic anomalies’ seen in the Araku prospect,” Wilson said.
“It is hard not to become more positive on such a description alongside the information that 500mmboe is only for the primary target of three separate layers of upper Cretaceous target formations.”
The analyst added, meanwhile, that a success would be more similar to the SNE project rather than a ‘Jubilee like’ result, as such he said that it would therefore be less impactful.
Jefferies has an ‘underperform’ rating for Tullow with a 155p price.