Tullow Oil PLC’s (LON:TLW) has taken another blow with its Marina-1 exploration well offshore Peru coming up dry.
The well tested the La Cruz and Mal Pelo formations on block Z-38 and despite minor gas shows there were no indications of hydrocarbons in the primary targets in the Tumbes formation.
Marina-1, which was drilled to 3,022 metres in 362 metres of water, will now be plugged and abandoned.
Karoon Energy is the operator while Tullow has a 35% interest.
Mark MacFarlane, Tullow’s chief operating officer, said: "This is the first ever well in the deep-water section of the under-explored Tumbes basin.
“We will now integrate the important well information with the seismic data that we are currently reprocessing and update our prospect inventory for blocks Z-38 and Z-64.
"Tullow is building an extensive exploration position in Peru and, while this result is not what we had hoped for, we remain positive about Peru's wider offshore exploration potential."
Bad news just keeps on gushing
The Irish oil group was the worst performing share on the FTSE 350 in 2019 after a difficult end of the year that saw senior management depart after a production downgrade and disappointing drill results offshore Guyana.
Tullow has US$2.9bn of debt and chairman Dorothy Thompson is working in an executive capacity until a replacement CEO is found for Paul McDade, who departed the company in December.
A review of the business is underway and the dividend has been suspended to conserve cash.
Sam Wahab, at SP Angel, said the Peru dry well is another setback as the company attempts to bolster its valuation through historically successful exploration activities.
Tullow will now integrate the well information with the seismic data that it is currently reprocessing and update its prospect inventory for blocks Z-38 and Z-64.
Shares fell 4% to 43.4p, valuing the oiler at £637mln, and taking its loss in value over the past twelve months to more than 80%.
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