Tullow dumps Kudu, courts Eco
Despite a significant decline in the price of crude oil, this has not deterred Tullow Oil plc from pursuing various projects and partnering up with Canadian outfit, Eco Atlantic Oil and Gas. Only last year, Tullow Oil pulled out of the Kudu gas to power project and has instead increased its working interest in the Cooper block in the Walvis Basin.
Releasing its interim results this week Thursday, the most notable feature was a write-off to the tune of US$2.2 billion. By the end of business day, the share price took a major dive, closing the day at 352.70 cents, – 4.8% lower.
The results however have not restrained Tullow from actively pursing exploration projects and as a result, setting aside US$200 million for exploration work in West Africa. Arguably the biggest boost of all, however, came earlier in the year when Tullow Oil agreed to acquire up to a 40% working interest in the Cooper block previously majority-owned by Eco Atlantic.
Having recently completed a 1,000 sq km 2D seismic sweep on the Guy block in the Walvis Basin, where it partners Azimuth Namibia Limited and the National Petroleum Corporation of Namibia (NAMCOR), Eco Atlantic Oil & Gas is advancing its Namibian projects nicely after a year of progress in the field.
According to Eco’s Chief Operating Officer, Colin Kinley, the recent work on the Guy block is narrowing the search as to where to shoot 3D seismic.
“Our confidence in establishing a resource is increasing as we progress the exploration,” he said.
Said Kinley, that’s not imminent but it sets Eco up to participate in some near future term drilling as it advances through its various seismic studies.
But the scale of Eco’s task has got bigger after a recent pact with another fellow Namibian explorer, Pan African Oil Limited.
With a proposed amalgamation of local interests with Pan African, which operates two offshore licenses covering close to 13,000 sq km, in a statement issued late in December 2014, Eco said the deal “will strengthen Eco Atlantic’s position as the dominant license holder offshore Namibia, a region with the potential to deliver world-class petroleum discoveries.”
The amalgamation is also expected to result in cost savings and other efficiencies, it said.
The resulting corporation will be a wholly-owned subsidiary of Eco Atlantic. And it has given the company the confidence to look further afield too.
Kinley called it a “fantastic opportunity” for the company saying “It could well be, and it’s certainly a fashionable address right now to stake your claim.
What matters most, however, will be flagging up the results from all the recent seismic work in Eco’s core territory, Namibia.”
Added Kinley, “if we can get a better idea of what the potential is here, especially with the aid of any 3D seismic and ultimately when we might get to see some drilling to turn all of this potential into actual resources and eventually production, then things really are moving in the right direction.”