Tullow Oil gushes lower as it plugs and abandons Araku-1 exploration well

Shares in Tullow Oil gushed lower on Friday after the company said its Araku-1 exploration well in Suriname found no significant reservoir quality rocks and is now being plugged and abandoned.

Still, Tullow said it has gained "important geological insights" from the well, in combination with high quality 3D seismic data, which have de-risked deeper plays offering significant future exploration potential in the group's acreage.

Exploration director Angus McCoss said: "The Araku-1 well was an ambitious wildcat exploration well that was drilled efficiently and at very low cost. While we have not made a commercial discovery, we are encouraged by recovering gas condensate from the well and remain fully committed to exploration in Suriname and Guyana.

"Tullow continues to pursue the considerable prospectivity and potential of this large licence and the wider region. We will now consider our next steps with our joint venture partners."

Whitman Howard said: "Although we would expect Tullow’s share price to be a bit weak on today’s news, we remain with our 'buy' recommendation given i) valuation ii) a stronger and more stable oil price iii) Guyana exploration iv) ramping up of production at TEN v) potential M&A in 2018."

At 0825 BST, the shares were down 4.4% to 174.40p.