TULLOW Oil bucked the market downturn to rise three per cent yesterday, after a strong exploration update for its Kenyan activities.
The FTSE 100-listed oil explorer doubled its resource estimates from two Kenyan wells to around 5,000 barrels of oil per day (bopd) per well.
Drilling on another Kenyan well resulted in a new oil discovery.
Group working interest production for the first half of the year averaged at 88,600bopd, in line with expectations. Full-year guidance was narrowed to 86-90,000bopd, due to delays to production at some of Tullow’s West African assets.
Despite the share movement, broker Investec reiterated its ‘sell’ rating on Tullow due to an increase in net debt, the narrowing of production guidance and no developments in asset sales.
“Over the past two months, Tullow has made major progress in three key areas of its operations,” said chief executive Aidan Heavey. “With high-quality production continuing to underpin our financial position, we are well placed for the remainder of this year and into 2014.”
Tullow’s shares closed 2.7 per cent higher at 1061.00p.