Tullow Oil Plc, the U.K. explorer searching for Ethiopia’s first crude, fell to a 19-month low in London trading after delaying the Sabisa well.
The shares slumped 5.4 percent to 1,097 pence, the lowest price since September 2011.
“Hole instability issues have required the drilling of a sidetrack,” or secondary wellbore, the London-based company said today in a statement. “The sidetrack recently commenced and a result is now expected in late May,” rather than in March as previously planned.
Tullow’s partner in the project, Africa Oil Corp., has lost almost 10 percent in Toronto since April 12 when shareholder Lukas Lundin said drilling had been set back by technical difficulties. The exploration group, which also includes Marathon Oil Corp., has drilled Sabisa in western Ethiopia to 1,810 meters (5,940 feet) and found evidence of hydrocarbons in sands, Tullow said today.
“Encountering a sand formation with hydrocarbons gives a promising initial indication that this basin has potential,” Oswald Clint, a London-based analyst at Sanford C. Bernstein & Co., wrote in an e-mailed report.
Separately, the company said its Ngamia-1 well in Kenya flowed 281 barrels of oil a day during tests. Tullow and Africa Oil announced Kenya’s first oil discovery at Ngamia-1 in the Turkana region in March last year.