London-listed Eco Atlantic Oil & Gas (AIM:ECO) noted Tullow Oil’s Carapa-1 well discovery at the Kanuku licence offshore Guyana as “very important” in reflecting a significant 2020 for the group.
Tullow reported yesterday that the Carapa-1 well encountered around 4m of net oil pay based on preliminary interpretation — testing indicated that the oil is 27 degrees API, with a sulphur content of less than 1%.
While this net pay is lower than pre-drill forecasts, the results remain positive and bode well for the Kanuku licence looking ahead.
The success is a huge step forward following disappointing results at the Jethro-Lobe and Joe-1 discoveries which were found to be mobile heavy crudes with high sulphur content.
"The Carapa discovery is very important to us technically and confirms our thinking on prospectivity on our Orinduik block,” said Colin Kinley, Chief Operating Officer of Eco Atlantic.
“We have a proven source kitchen to the North, with ExxonMobil and partners having defined and now producing 32 API at the Liza field to the North of us, and now a 27 API oil discovery on Carapa to the South of us,” he added.
Shares in Eco Atlantic were trading 7.69% higher at 56p on Friday morning.
Carapa-1 is adjacent to both Eco’s Orinduik exploration area, of which the group holds a 15% working interest in, and Exxon’s prolific Stabroek licence block.
Kinley said that as more wells were drilled, it was “becoming clearer” to understand and define new drilling locations and noted that Eco could now see the reservoirs clearly in the cretaceous.
“We see very significant thick pay opportunities in the cretaceous section on Orinduik and we are currently defining our upcoming drilling plans, which we hope to have confirmed in the next few weeks,” he explained.
Looking forward across 2020, Kinley said that it would be a “significant year” for Eco Atlantic, with the discovery at Carapa being “exactly” what the board was looking for.
Eco added that the new competent persons report is currently under preparation and will incorporate the two recent Tertiary discoveries alongside ExxonMobil's additional regional discoveries in 2019 and some of the 'read through' from the derisking of the cretaceous section.
An estimated 3 billion barrels of oil potential is forecasted across the Orinduik block that the Carapa discovery has helped define, the company stated.
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