LONDON, Nov 14 (Reuters) - Britain’s Tullow Oil said it will reveal a clutch of significant drill results before the end of 2012, as exploration continues to dominate its strategy even though it is now a significant oil producer.
Results from Tullow’s wells in Kenya and off the coast of French Guiana, both so-called frontier areas in that they are not already producing oil, are due in the coming weeks and could help add to its portfolio of future projects.
The company guided on Wednesday that annual average production would be in line with its forecast of 80,000 to 84,000 barrels of oil equivalent per day, after a year which has seen it develop a programme to stimulate production at a key field in Ghana.
The potential for positive drilling newsflow from Tullow contrasts sharply with recent lacklustre third quarter production from industry heavyweights such as Shell and Exxon, which are struggling to raise output.
BG Group, in particular, harmed its reputation as a growth stock in a sector otherwise lacking such a profile when it warned in October that output would be flat in 2013.
Tullow, with a market capitalisation of just under $20 billion, has the advantage over its larger peers - BG is almost three times the size of Tullow - in that it is still small enough for single drill results to move its valuation.
Tullow’s upcoming wells, including one in a frontier-part of Ethiopia which will reach final depth early next year, have the potential to “materially increase” net asset value, analysts at Barclays said.
Shares in the company have more than tripled in value over the last five years since exploration success in Ghana and Uganda, where the company is working on a huge new oil project.
Investors are keenly awaiting the results of the next Kenya well, plus test results from another well drilled nearby in the country, where they hope the company has discovered enough oil to open up a new hydrocarbon-production region.
The same goes for the results from Tullow’s well off French Guiana, a follow up well to assess a discovery it made in September 2011.
BP Plc and France’s Total SA are among the top players to have pledged to boost exploration spend, trying to reverse the effect of a decade of lower investment on it, during which companies such as Tullow have proved their discovery expertise.
Shell in January enlisted the help of Tullow to find major new oilfields in the Atlantic, building on its entry into Tullow’s French Guianan licence some years before.
Shares in Tullow traded down 0.36 percent to 1,380 pence at 1305 GMT.