CAIRN Energy has found more oil off Senegal but an investment bank described the results of its latest well as disappointing.
Edinburgh-based Cairn said its latest well had encountered oil in one of two zones targeted maintaining the company’s record of success in its pioneering exploration drive off the West African country.
Chief executive Simon Thomson noted the company has drilled ten wells off the country in the last three years, in what is a relatively under-explored area. None of the wells were dry.
The latest well encountered oil in the same geological zone in which Cairn made the FAN discovery in 2014. Cairn also made the bumper SNE discovery off Senegal that year.
The company will analyse the results to see if the finds made by the two FAN wells are commercial.
Analysts at JP Morgan Cazenove described the results of the latest well, FAN south -1, as “somewhat disappointing”.
They noted: “ Further work is required to assess potential commerciality, implying a smaller resource than the 110 mmbo ( million barrels oil) pre-drill forecast.”
But Mr Thomson said the information gathered from the well would help deepen Cairn’s understanding of a basin which has attracted the attention of the industry’s giants following the company’s success.
The results of appraisal drilling on the SNE find have highlighted the potential of a discovery that the company believes may contain more than a billion barrels.
Cairn hopes SNE may be brought onstream in 2021.
The rig used on FAN south-1 will go on to drill a well on a prospect around 10 miles north of where the original SNE find was made.
Mr Thomson said as planning for the development of SNE moves ahead the SNE North prospect has the potential to boost Cairn’s total resources in Senegal.
Cairn shares closed down 1.3p at 169.1p.
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