Irish-founded exploration company Tullow Oil slumped to a four-month low in London trading after the explorer failed to make a commercial find at the Zaedyus-2 well off French Guiana.
Tullow plunged as much as 6.8 per cent to 1,278 pence, the lowest intraday price since August 3, after drilling results showed the well was not connected to the earlier Zaedyus-1 offshore find.
The well "encountered a total of 85 metres of reservoir quality sands with oil shows in several objectives but did not encounter commercial hydrocarbons at this location," Tullow said in a statement.
Tullow, along with partners Royal Dutch Shell and Total, spent more than $250 million last year drilling the Zaedyus-1 well, which discovered light and heavy oil.
In March, it increased the oil province's resources estimate to 840 million barrels of oil equivalent from 700 million barrels.
"Very disappointing result," said Stuart Joyner, an analyst at Investec Securities in London.
Zaedyus-2 was drilled in a shallower section of the reservoir about 5 kilometres from the Zaedyus-1 well, Tullow said.
The next planned well, called Priodontes-1, will target an adjacent prospect within the same Cingulata fan system, and is expected to commence drilling in early December.
Bloomberg
