(Reuters) - Tullow Oil Plc (TLW.L) said it had plugged and abandoned an exploration well in offshore Suriname, after not making a commercial discovery.
“The Araku-1 well was an ambitious wildcat exploration well that was drilled efficiently and at very low cost,” Exploration Director Angus McCoss said.
“While we have not made a commercial discovery, we are encouraged by recovering gas condensate from the well and remain fully committed to exploration in Suriname and Guyana,” he said.
Shares in Tullow were down 3.2 percent at 176.6 pence at 0704 GMT, making it the biggest faller on the STOXX Oil and Gas Index .SXEP. [nL8N1N21YL]
The well was drilled in a block where Tullow Oil operates with a 30 percent interest alongside joint venture partners, Statoil STL.OL and Noble Energy (NBL.N), Tullow said.
Analysts at Jefferies said that while the Araku-1 exploration well has proved unsuccessful, the result “ironically” meant no additional capital expenditure demands on Tullow’s balance sheet.
Investec analysts said: “The well was also being closely watched by the market with expectations in our view higher than normal given the recent successes of Exxon (XOM.N) across the martime border in Guyana.”
Reporting by Noor Zainab Hussain in Bengaluru. Editing by Jane Merriman