(JollofNews) – Oil explorer Cairn Energy and its joint venture partners have discovered oil at a well in a previously untapped area offshore Senegal, the company said on Tuesday, sending its shares
more than 10 percent higher.
The companies encountered 29 metres of net oil bearing reservoir at the FAN-1 well, Cairn’s first drill in Senegal, located around 100 km off the coastline and in 1,427 metres depth.
“We have encountered a very substantial oil bearing interval which may have significant potential as a standalone discovery,” said Cairn Energy chief executive Simon Thomson.
Shares in the oil explorer were trading 10.7 percent higher at 199.5 pence at 0724 GMT on Tuesday, making it the highest gainer among the FTSE 250 companies.
Cairn Energy has a 40 percent interest in three offshore blocks in Senegal, while ConocoPhillips has 35 percent, FAR Ltd 15 percent and Senegal’s national oil company Petrosen owns 10 percent.
Analysts at Jefferies said the news of an oil discovery in a previously undrilled basin was “extremely positive” and recommended buying the company’s shares.
Cairn said the partners were planning to move the oil rig used on the well to a second well, SNE-1, targeting depths of 1,100 metres.
(Reporting by Karolin Schaps, editing by William Hardy)