Tullow Oil announces gas find at well in Bangladesh

Tullow Oil said yesterday that it had discovered gas at its Bangora well in Bangladesh, reports Jane O'Sullivan, Markets Correspondent

The company said the third well drilled in Block 9 in Bangladesh encountered a number of gas-bearing reservoirs.

The well flowed at a hefty rate of more than 120 million standard cubic feet per day (mmscfd). Tullow also said the gas quality was high.

"We are delighted with the better-than-expected test results from the Bangora-1 well," Tullow chief executive Mr Aidan Heavey said.

"Following on from the earlier discovery at Lalmai, we have now had gas discoveries at each end of a 40 km long anticlinal structure."

The company previously successfully tested a well at Lalmai, the second of three wells, the first at Gumti having proved dry.

Analysts described the find as "a potentially significant discovery".

"While it is presumptuous to assume a continuation at the moment, the well result pushes up the probability that the overall target contains closer to 600 billion cubic feet (bcf) of gas than 300 bcf," Davy analyst Mr Job Langbroek said.

If the higher figure is realised, he believes the project could be worth nearly 8p per share to Tullow, compared with his previous estimate of 3.5p.

Shares in the company, which rose strongly in London on Friday in anticipation of good news, eased by 2p yesterday to 148.2p.

The well will now be suspended as a future production well while the company carries out an accelerated appraisal programme over Bangora and the earlier Lalmai discovery in a bid to bring the field into production and deliver gas to the market at an early date.

Tullow operates Block 9, in which it was awarded a 30 per cent interest in April 2001.

Its partners are Canada's Niko Resources, which holds a 60 per cent interest, and Bangladesh Petroleum Exploration and Production Ltd (BAPEX), which holds 10 per cent.