Eco Atlantic Oil & Gas Ltd (LON:ECO) (CVE:EOG) shares rose on Friday as it described Tullow Oil PLC’s (LON:TLW) Carapa discovery, offshore Guyana - revealed on Thursday - as “very important” and said that it is expecting 2020 to be a significant year.
After falling on Thursday, Eco shares were up 7.7% to 56p in early trading on Friday.
Success in Tullow’s non-operated exploration well - which confirmed high quality, light sweet crude albeit in a smaller than expected section of net pay - comes after a disappointing outcome in the lab for 2019’s Joe and Jethro discoveries (which were found to be lower grade heavy and sulphurous crude).
Carapa-1 was drilled by Repsol in the Kanuka block which is adjacent to both Eco’s Orinduik exploration area and Exxon’s prolific Stabroek licence block.
Significantly, like Exxon’s Liza field, Carapa’s discovery was made in the Cretaceous play whereas the Joe and Jethro discoveries are Tertiary age oil systems.
"The Carapa discovery is very important to us technically and confirms our thinking on prospectivity on our Orinduik block,” said Colin Kinley, Eco’s chief operating officer.
“The existence of a good oil grade unaffected by sulphur in board of us is excellent news.
“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.
“We continue to gain a good understanding of the transportation and pooling systems, and we can see the reservoirs clearly in the cretaceous.”
“As more wells are drilled, it is becoming clearer to understand and define new drilling locations.
“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.”
Eco looks forward to 2020
Kinley added: “2020 is a significant year for Eco, and the discovery at Carapa is exactly what we were looking for.
“We now have drilling prospects that are significantly brightened.”
Whilst Eco and its investors await news from operator Tullow regarding the 2020 work plans for the Orinduik block, a previously commissioned new third party assessment of the project’s resources is due.
In Friday’s statement, Eco noted that the new competent persons report will incorporate the two recent Tertiary discoveries along with ‘read across’ from the de-risking successes at Carapa and also Exxon’s Stabroek block.
Some 3bn barrels of oil potential is presently envisaged across the Orinduik block.
Eco owns a 15% interest in Orinduik, where Tullow is operator with a 60% (and Tullow also holds a non-operating 37.5% interest in Kanuka).
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