UPDATE 2-Tullow eyes first commercial oil for Kenya

Wed Feb 13, 2013 5:19am EST
 
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* "First potentially commercial production"

* Still a lot of exploration and appraisal to do

* Shares up 5.2 pct

By Andrew Callus

LONDON, Feb 13 (Reuters) - Africa-focused oil company Tullow Oil Plc released a set of Kenyan well test results on Wednesday which it said could lead to the country's first commercial production.

Tullow, which has been under pressure to deliver some good drilling news after a disappointing trading update in January, said results from its Twiga South-1 well showed "the first potentially commercial flow rates achieved in Kenya."

The London-listed company has operations in several African countries but investors see its Kenyan drilling as particularly important.

Four flow tests were carried out on Twiga South-1 in January and early February and a fifth test is ongoing, Tullow said, predicting a total combined flow rate of over 2,850 barrels of oil per day for the well in western Kenya.

"That's better than the 500 barrels a day... they discussed as an expectation," said Macquarie analyst Mark Wilson. "They've pulled a rabbit out of the hat there on operational progress."   Continued...